remedies 1 - principles of compensation Flashcards

1
Q

remedies for breach

A
  • enforcement of contracts is usually by compensation for loss caused (damages)
  • there are various possible ways of measuring damages but the “expectation loss” is the primary method of doing so –> “what did I expect to make out of this contract?” = what you would have been paid had the contract gone through
  • in limited situations actual performance may be compelled
  • equitable remedies of specific performance and injunction
  • consumer remedies (repair, replacement)
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2
Q

contract law is not punitive

A
  • contract law does not seek to punish those in breach of contract
  • damages = punishment, rectify the situation
  • contract clauses seeking to impose a penalty for breach of contract are void as a matter of public policy
  • longstanding rule dating from when credit was difficult to attain, so debtors may be better protected (since they could be imprisoned)
  • in practice, many contracts (esp commercial) will instead provide for a specific sum to be paid in the event of breach = liquidated damages
  • if liquidated damages clause penalise the party in breach, they will not be enforced by the courts
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3
Q

has the claimant suffered an actionable type of loss?

A
  • financial losses are traditional type of loss in contract cases
  • compensation for non financial loss is not generally recoverable
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4
Q

some scope for non financial losses

A
  • consumer surplus: the consumer’s additional non financial interest in performance
  • distress: recovery of damages where the claimant has suffered physical discomfort or loss of pleasure, peace of mind etc
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5
Q

performance interest

A

the interest in actual performance of the contract - given limited protection by English law (claim for an injunction/specific performance) –> personal contract eg for a painting, a particular artist to paint a particular work for art

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6
Q

expectation interest

A

the interest in the value of performance - the sum necessary to put the claimant into the position would they have been in if the contract had been performed eg movies and music contracts –> incalculable because you do not know how much something will gross = don’t know what the value of the contract is

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7
Q

reliance interest

A

puts the claimant into the position they were in before the contract was made which involves compensating expenditure made in performance of the contract which is wasted as a result of the breach eg actors who pull out of productions, cannot recast

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8
Q

restitutionary interest

A

restoration to the claimant of a benefit conferred on the defendant to which the defendant is not entitled –> able to claim the money back eg people stealing buses

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9
Q

how is he loss converted into damages?

A
  • loss of a chance
  • expectation loss measure of damages
  • difference in value
  • cost of cure
  • loss of amenity
  • reliance measure of damages
  • restitution
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10
Q

loss of a chance - chaplin v hicks 1911

A
  • C entered a beauty contest organised by H, a famous actor
  • 50 finalists chosen through regional heats, 12 winners would hve. role in a production with H
  • C made it to final but did not recieve her invite until it was too late to attend
  • sued for loss of chance of gaining employment for £100
  • did not have to demonstrate that she would have won the competition, but that she had been deprived of the opportunity to do so
  • if there is no linear pathway, loss of chance will not work, Chaplin worked because it was CLEAR
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11
Q

Expectation losses

A
  • most common basis for award of damages
  • seeks to replicate successful performance of the contract
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12
Q

Robinson v Harman 1848

A

“The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed”

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13
Q

(British Westinghouse Co Ltd v Underground Electric Railways Co Ltd 1912)

A

“He who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed”

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14
Q

Compensating expectation losses

A
  • 2 possibilities for compensating expectation losses
  • Difference in value: what is the difference between what the claimant wanted and what they actually received
  • This is the most usual means of rectifying expectation losses
  • Cost of cure: the amount it would cost the claimant to get a third party to perform the contract or rectify the breaches caused by the defendant
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15
Q

Which option to choose?

A
  • Sometimes the diminution of value is very small, but nonetheless significant to the injured party = reasonableness is key
  • Where cost of cure is higher than the diminution in value, the injured party is able to claim the cost of cure
  • If the cost of cure is unreasonable 0 the claimant cannot claim on this basis
    unreasonable = Ruxley Electronics “if the cost of the cure is wholly disproportionate” to diminution in value
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