PL14: Remedies Flashcards
1
Q
Specific performance
A
requiring the defendant to carry out their undertaking exactly according to the terms of the contract.
2
Q
Injunction
A
preventing the defendant from doing something which the
3
Q
Purpose of damages
A
Compensate the claimant for damage, loss or injury that they have suffered as result of breach.
Not punishment
4
Q
Damages
A
payment of money
5
Q
Damages when claimant have not suffered loss
A
- Entitled judgement
- Nominal damages - token amount
6
Q
Compensating the innocent party
A
Putting the innocent party post-breach in the same position had the contract been performed.
7
Q
Expectation Interest
A
Putting the party in the position they expected to be in
8
Q
Robinson v Harman 1848
A
9
Q
Parke B
A
Rule of common law
“to be placed in the same situation, with damages, as if the contract had been performed.
10
Q
Three mechanisms for calculating the expectation interest
A
- Cost of cure
- Dimunition in value
- Loss of amenity
11
Q
Ruxley Electronics and Construction Ltd v Forsyth [1996]
A
- Pool depth (meant to be 7 ft 6 inches; only built to 6 feet)
- Cost of cure refused
12
Q
Cost of cure
A
Cost of substitute/remedial work to put the claimant in the position they would’ve been had the contract been properly performed.
13
Q
Method of calculating expectation interest in contracts involving defective works
A
Cost of cure
Birse Construction
Ltd v Eastern Telegraph Co Ltd [2004]
Must act reasonably
14
Q
Birse Construction
Ltd v Eastern Telegraph Co Ltd [2004]
A
15
Q
Must act reasonably in relation to the defect works
A
McGlinn v Waltham Contractors [2007]
Unreasonable to demolish and rebuild for purely aesthetic reasons.
Award limited to costs incurred remedying defects.
16
Q
McGlinn v Waltham Contractors [2007]
A
Unreasonable to demolish and rebuild for purely aesthetic reasons.
Award limited to costs incurred remedying defects.
17
Q
Diminution in value
A
Calculated by reference to the difference between performance received and that promised in the contract.
18
Q
Ruxley v Forsyth [1996]
A
- Swimming pool 6ft
- Unreasonable for cost of cure as out of proportion to benefit obtained.
- Claimants lack of intention to carry out remedial term relevant
- Considered Loss of amenity - awarded £2,500 = non-economic loss of pleasure
19
Q
Loss of amenity
A
Developed in Ruxley - available remedy where their loss is not economic in value, but nevertheless has a value to them
20
Q
Loss of amenity in commercial settings
A
‘unusual, if not
impossible’ for damages to be awarded
(Regus (UK) Ltd v Epcot Solutions Ltd [2007]).
21
Q
Regus (UK) Ltd v Epcot Solutions Ltd [2007]
A
22
Q
Distinguishing between:
Diminution in value
Cost of cure
A
- Disparity only likely where there is dispute with regard to particular specification required by the purchaser
- What is the claimants expectation loss - what position would the claimant be in had the contract be properly performed
23
Q
Robinson v Harman)
A
what position would the claimant have been had the contract been properly performed
24
Q
Expectation damages calc
A
Difference between expected profit and actual profit
25
Reliance interest
allows claimant to recover the expenses which have been incurred in preparing for, or in part performance of, the contract which have been rendered pointless by the breach.
* backwards in approach
26
Limited to reliance loss
If expectation interest is very speculative won't award expectation damages
27
Reliance interest only allows recovery of...
**wasted expenditure**, this does not mean all expenditure
28
Anglia TV v Reed [1972]
* Claimant engaged the defendant to star in a film they were making
* had to abandon film as couldn't find replacement
* claimed damages in respect of expenses
* Given damages under reliance, even though prior to contract
29
Reliance losses are incurred...
Reliance losses are **incurred prior to breach**, not those incurred as a consequence of breach
30
Reliance losses
Look at actual spend
Remember wastage
31
Two main ways of awarding damage
Expectation interest - forward
Reliance interest - backward
32
Particular types of loss
Mental distress
Loss of reputation
Loss of chance
33
Damages for mental distress
General rule is damages not awarded in relation to mental distress, anguish or
annoyance caused by breach of contract.
Addis v Gramophone Co Ltd [1909]
34
Addis v Gramophone Co Ltd [1909]
House of Lords refused to uphold an award which had been made in relation to the ‘harsh and humiliating’ way in which the claimant had been dismissed from his job in breach of contract.
35
Johnson v Unisys Ltd [2003]
Damages for distress and injury to feelings resulting from the manner of dismissal are unavailable in the law of contract
36
Exceptions to rules of mental distress
* Contracts whose whole purpose was pleasure/relaxation
* more recently have allowed damages where "major object"
37
Jarvis v Swan Tours [1973]
compensation was limited to cases involving contracts whose **whole purpose**
was the provision of pleasure, relaxation and peace of mind
38
Farley v Skinner (No. 2) [2001]
a **major object** (though not the whole purpose) of the contract was to
provide pleasure, relaxation and peace of mind
39
Damages for loss of reputation
General rule is that damages will not be awarded for loss of reputation
40
Malik v Bank of Credit and Commerce International [1998]
* Bank of Credit and Commerce International (BCCI), which collapsed in 1991
* Adversely affected employment prospects
* Implied term of trust and confidence
*Damages awarded limited to financial loss
41
Damages for loss of chance
Opportunity is:
* quantifiable
* real/substantial chance opportunity would have come to fruition
**Chaplin v Hicks 1911**
42
Chaplin v Hicks [1911]
* denied the chance to go to the final round of contest.
* "real and substantial"
* If more than 50% chance of winning - seek to recover loss in full
43
Damages on behalf of another
* Cannot be recovered on behalf of another party for loss of another party
See privity
44
Damages can only be recovered if....
Damages can only be recovered if **they are caused by the breach**
45
Damages cannot be recover if they are...
Damages cannot be recover if they are **too remote from the breach**
46
Damages can be reduce if ...
Damages can be reduced if the claimant has **failed to take reasonable steps to mitigate its losses**
47
Causation
* Establish causal link
* Assessing:
- has caused loss
- defendant responsible
48
Define Factual causation:
Whether the breach by the defendant has, as a matter of fact, caused the
loss suffered by the claimant.
49
Define Legal causation:
Whether the defendant should be held responsible for loss which has, as a
matter of fact, been caused by its breach.
50
Factual Causation
‘common sense approach’ (Galoo Ltd v Bright Grahame Murray [1994]
"dominant" or "effective" cause of loss
51
Galoo Ltd v Bright Grahame Murray [1994]
52
Legal causation
novus actus interveniens – a particular category of intervening event which
will be treated as having broken the chain of causation.
Whether chain of causation was broken
53
novus actus interveniens
new intervening act
54
Lambert v Lewis [1982]
* Defective trailer
* Used when obv broken
* Accident
* Use broke chain of causation
* Dealer held not liable
55
Monarch Steamship Co Ltd v A/B Karlshamns
Oljefabriker [1949]
If the intervening event was ‘likely to happen’ it generally will not be held to break the chain of causation.
56
Remoteness of damage
* Not all losses flowing from (ie caused by) a breach of contract
are recoverable
* Line drawn in law of remoteness
57
Hadley v Baxendale (1854) - damage test
Damages
* Arising naturally - ie usual course of tings
* May have reasonably been supposed to be in the contemplation of both parties
58
Hadley v Baxendale (1854)
* Broken mill shaft
* Delay in mill-shaft
* Two stage test
First limb - no losses as expect a spare shaft
Second limb - defendant not reasonably in contemplation
No damages
59
First Limb of Hadley v Baxendale (1854)
loss of a type ordinarily and naturally arising from the breach
Not based on knowledge of particular parties
"usual course"
60
Second Limb of Hadley v Baxendale (1854)
Defendant had sufficient actual knowledge of the particular and special
circumstances to be aware of the risk of those losses.
61
Lord Hoffman
Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia, The Achilleas
[2009]
found liability for damages upon the intention of the parties
(objectively ascertained) because all contractual liability is voluntarily undertaken
62
Jackson v Royal Bank of Scotland [2005]
what was in the contemplation (or knowledge) of the parties
was to be judged at the time of contracting, as opposed to the time of the breach.
63
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949
* Boiler damaged and delayed
* Loss of "usual course of things" laundry - first limb of HvB
* Loss of lucrative contracts do not meet either limb of HvB
64
Mitigation
Injured party should take ‘reasonable steps’ to minimise the effect of the breach.
(British Westinghouse Electric and Manufacturing Co v
Underground Electric Rail Co [1912])
65
(British Westinghouse Electric and Manufacturing Co v Underground Electric Rail Co [1912])
66
No obligation to mitigate but..
Technically, there is no obligation to mitigate, but **losses attributable to a failure to do so are not
legally recoverable.**
What is "reasonable" - question of **fact**
67
Pilkington v Wood [1953]
"reasonable" mitigation
No expectation that the claimant should embark on ‘a complicated and
difficult piece of litigation’ in order to minimise the effects of the defendant’s breach.
68
Payzu v Saunders [1919]
* Silk
Reasonable steps to mitigate may include accepting the performance offered by the defendant under a new contract even when that performance amounts to a breach of the original contract
69
Banco de Portugal v Waterlow & Sons [1932]
claimant’s actions ‘ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the
difficulty’
70
Is there a duty to mitigate a claim for payment of a debt?
No duty to mitigate; because the amount is payable as a contractual right rather than as damages
71
Reliance Interest
72
C & P Haulage v Middleton [1983]
Mr Middleton spent £1,767.51 to put fixtures in place.
He was ejected from premises.
Claimed damages
**losses must flow from the breach, not for making a bad bargain**
Limited to nominal damages
73
C & P Haulage v Middleton [1983] shows that ....
It is only possible for the claimant to claim reliance interest if the contract would have enabled them to recoup those expenses had it been properly performed
74
Omak Maritime Ltd v Mamola Challenger Shipping Co Ltd 2010
Defendant to prove the would not have recouped the expenditure had contract gone ahead
75
The purpose of damages is compensatory meaning that....
No award of
damages can put the claimant in a better position than it would have been in had the contract
been performed
**(the ‘no windfall’ principle)**
76
‘no windfall’ principle
No award of
damages can put the claimant in a better position than it would have been in had the contract
been performed
77
Restitution Interest
Interest a claimant has in the restoration to them of benefits which the defaulting party has acquired at their expense
78
Attorney-General v Blake
[2001] and Restitution Interest
Certain circumstances in which a claimant
can recover the profit which the defendant has made from its breach of contract
79
Attorney-General v Blake
[2001]
* Blake divulged official secrets
* Crown sought to recover royalties
* Held in exceptional circumstances
* exceptional
* **legitimate interest** in depriving profit
80
Efficient Breach
* Cynical and deliberate
* Enabled to enter into more profitable party
* By entering into contract, couldn't perform claimant contract
**puts the breaching party in a better position**
81
Efficient Breach and Restitution
* Existent of "efficient breach" is not enough
82
Morris-Garner v One Step (Support) Ltd [2018]
Exceptional nature of Blake once again emphasised
82
Experience Hendrix LLC v PPX Enterprises Inc
(2003)
Not exceptional enough for restituiton.
83
Total Failure of consideration
* One party has provided something of value under the contract but has received nothing in return.
* Restitution operate to reverse unjust enrichment
84
Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia, The Achilleas [2009]
*
85
Supershield Ltd v Siemens Building Technologies FE
Ltd [2010]
86
John Grimes Partnership Ltd v Gubbins [2013]
87
Remedies under CRA 2015
Part 1 provides remedies to consumers when implied terms are breached
88
CRA 2015 - non conforming goods
Fail to meet any of
the requirements in:
s 9 (satisfactory quality),
s 10 (reasonably fit for their particular purpose) or
s 11 (correspondence with description)
89
Remedial options for non-conforming goods ; CRA 2015
(a) The short-term right to reject
(b) The right to repair or replacement
(c) The right to a price reduction or the final right to reject.
90
