Remedies 1 Flashcards
What is the purpose of an award of damages?
Purpose is to compensate the claimant for damage / loss / injury
What are nominal damages?
Damages of a token amount to acknowledge a breach of contract
What is expectation interest?
A measure of damages putting the innocent party in the same position post-breach that they should have been in had the contract been performed.
What are the three mechanisms for calculating the expectation interest?
Cost of cure
Diminution in value
Loss of amenity
What is the cost of cure
Cost of substitute or remedial work required to put the claimant in the position they would have been in had the contract been properly performed - but the claimant must act reasonably in relation to defective works.
What is the diminution in value?
The difference in value between the performance received and that promised in the contract
What is a loss of amenity calculation?
A reflection of the court’s growing willingness to accept that a consumer should have a remedy if the loss is non economic.
Impossible in a commercial setting
What is the reliance measure of calculating damages?
Allows the claimant to recover expenses which have been incurred in preparing for, or in part performance of, the contract.
How do you calculate expectation interest?
Expected profits vs actual profits
When will courts look to reliance losses, not expectation damages?
If expectation damages are highly speculative.
What specifically does reliance interest allow recovery of?
Wasted expenditure only - if you can use the item bought in preparation elsewhere, it is not wasted.
Only losses incurred prior to breach, not as a consequence of breach. Remedying defective performance is not a reliance loss.
Name three types of loss with special rules:
Mental distress
Loss of reputation
Loss of chance
What are the two categories of when damages can be awarded for mental distress?
Contracts with a whole purpose of provision of pleasure, relaxation and peace of mind
Non-pecuniary loss in a contract where a major objective was pleasure, relaxation and peace of mind.
When can damages be awarded for loss of reputation?
If they affect employment prospects; contracts of employment contain an implied term of trust and confidence such that the employer must carry out work in an honest way.
When is the loss of a chance / opportunity recoverable in damages?
If it is quantifiable in monetary terms and a real and substantial chance that the opportunity might have come to fruition.
What is the court’s attitude to loss of chance?
Reluctant to treat loss as too speculative and awards damages even if it is not straightforward.
How is loss of chance practically assessed?
Only if calculated as a percentage chance of obtaining a benefit of below 50%.
Claimant needs to show that their loss of chance falls below 50% and that it is real and substantial.
They will recover the proportion of chance proved.
If chance of obtaining a benefit is 50% or larger what should you do?
You should seek to recover expectation loss, proving this on the balance of probabilities.
What does the claimant need to establish show a causal link between the breach of D and the loss incurred?
Factual causation: did the breach cause the loss suffered by the claimant?
Legal causation: should the defendant be held responsible?
How has factual causation been interpreted by the courts?
Is the breach a dominant or effective cause of the loss?
How is legal causation interpreted by the courts?
Looks at whether there has been a NAI; - and if so considers whether it was ‘likely to happen’ - if so, it generally won’t break the chain of causation.
What is the law on remoteness in contract law?
Losses are recoverable if either:
1) It is a type of loss ordinarily and naturally arising from the breach [this is based on the usual course of things]
OR
2) The particular defendant had sufficient actual knowledge of the particular and special circumstances to be aware of the risk of those losses.
What must an injured party do when faced with a breach?
Ensure it mitigates its losses; losses attributable to a failure to mitigate are not legally recoverable.
This wouldn’t include extensive litigation but might include accepting performance offered by D under a new contract, even if this could be breach of the original contract
Is there a duty to mitigate a claim for part payment of a debt?
No, because it is payable as a contractual right rather than as damages.
What significant mitigating factor to reliance interest was established by C & P Haulage v Middleton?
It is only possible for the claimant to claim its reliance interest if the contract would have enabled it to recoup those expenses had it been properly performed.
Where does the burden of proof lie for reliance interest damages?
The defendant must prove that the claimant would not have recouped the expenditure had the contract gone ahead
What key principle underpins both expectation and reliance interest?
No award of damages can put the claimant in a better position than it would have been in had the contract been performed
What is the restitution interest?
The interest a claimant has in the restoration to them of benefits which the defaulting party has acquired at their expense.
When can restitution interest be claimed?
Exceptional circumstances call for an account of profits.
No fixed rules - court must consider all the circumstances.
Guide: does the claimant have a legitimate interest in preventing the defendant’s profit making activity and hence depriving him of his profit?
Other remedies must also be inadequate.
What is an efficient breach?
Cynical and deliberate
Breach enabled the defendant to enter into a more profitable contract elsewhere
By doing so, original contract could not be performed.
Can an efficient breach alone justify restitution?
No
In what other situation might the court order restitution payments?
Where there has been a total lack of consideration - restitution used to reverse unjust enrichment.
What is the Transfield approach to remoteness?
Idea of whether defendant had assumed responsibility for losses.
How do courts tend to analyse remoteness?
Hadley v Baxendale approach.
When should the Transfield approach be used?
In specific industries where it is clear that the Hadley approach would not reflect the expectation or intention reasonably given to the parties.
When is a good considered non-conforming under the CRA?
If it does not meet the requirement in S9 - satisfactory quality, s - 10 fit for purpose or s11 correspond with description
What three remedial options are available if a good is considered ‘non-conforming’
Short term right to reject
Right to repair / replacement
Right to price reduction or the final right to reject.
When is the short term right to reject available?
30 days from time ownership passes / delivery / goods installed
When is the right to repair / replacement?
Available unless impossible / disproportionate
When is the right to a price reduction / final right to reject available?
Both are not available
Only available after one repair / replacement goods remain non conforming, or repair / replacement are disproportionate
Or if trader has failed to do so in a significant time.
What are the rules on the final right to reject?
If exercised within 6 months, there should be full refund with no deduction for use EXCEPT for motor vehicles or any other goods specified by statutory order.
What remedies are available for contracts for digital content?
Right to repair / replacement
Right to price reduction
6 months window
What remedy is available if a trader has no right to supply digital content?
Full refund for all money paid for content within 14 days
What remedy if content has damaged a device?
Repair / compensatory payment
What remedies are available if services are non-conforming?
Right to repeat performance
Right to a price reduction
