Remedies

Question 1

what is the most common relief sought for a breach of contract

Answer 1

Damages

Question 2

what did the case of Robinson v Harman state about the purpose of damages?

Answer 2

The purpose of damages in Contract law is to put the person in the position they would have been in had the contract been completed

Question 3

remoteness of damage

Answer 3

Damages arising from breach are not recoverable where they are considered to be so far removed from the breach that it would be considered unfair to impose liability on the defendant for such harm

Question 4

what is the two part test for remoteness of damage established in the case Hadley v. Baxendale

Answer 4

1. The party who breaches the contract is liable for any damages that arise out of the natural course of things (judged objectively)
2. The party who breaches the contract is liable for special damages which both parties were aware of arising from a particular breach and were communicated to him.(judged subjectively)

Question 5

what are the facts of victoria laundry v Newman industries

Answer 5

Here the plaintiff owned a laundrette. The boiler was needed and contracted for urgently. it was given five months late. The defendant was liable for the loss of profits in the ordinary course of business under the first limb as it was a natural and probable consequence.

However the second limb was not satisfied in relation to loss of lucrative government contract. This has not been communicated at the time of entering contract and was not in the normal course of business

Question 6

what are the facts of Wilson v Dunville

Answer 6

A dairy farmer bought wheat which contained lead particles. It was a natural and probable consequences that the cattle got sick and so he was liable for the damage to them

Question 7

what did the case of Wilson v Dunville make clear?

Answer 7

The state of mind of the parties, i.e their knowledge or expectation is completely irrelevant for the purposes of the first limb

Question 8

what does the second limb test require?

Answer 8

The second limb test requires special knowledge on the part of the defendant.
The test requires that the ordinary reasonable man, having been possessed of such specialist knowledge at the time of contracting, would foresee loss would result from breach of contract

Question 9

what was held in the case of parsons (livestock) ltd v Utley, ingham and CO

Answer 9

All that is required is that the type of loss is foreseeable, even if the extent of it is not

Question 10

what are the facts of the case kemp v Instasun holidays

Answer 10

The plaintiff’s wife booked a package holiday in spain. Upon arrival, at the hotel they were supposed to staying they found that it was fully booked and that the plaintiff and his family had no alternative but to stay in the staff quarters of another hotel. The room they stayed was unhygenic and dusty, factors that aggravated the plaintiff’s asthma. However the travel agents had not been made aware of this condition upon the plaintiff’s wife booking the holiday.

The second limb was not satisfied as the defendants did not possess specialist knowledge concerning the plaintiff’s medical condition

Question 11

Expectation Loss

Answer 11

The party who breaches is liable to pay the innocent party such damages as will put the plaintiff in as good position as s/he would have had the defendant performed his promise or complied with the contract.

Question 12

how to calculate expectation loss?

Answer 12

The pratical way to achieve the amount of estimated losses is by calculating the difference between the position that the plaintiff would have occupied had the contract been performed and the position that the plaintiff is actually in as a result of the breach or non-performance of contract

Question 13

what does McDermott say about Expectation Loss

Answer 13

McDermott states that such damages are forward looking in that they seek to give the plaintiff something that he never had but expected to obtain

Question 14

Reliance loss

Answer 14

In anticipation of the contract being performed, the plaintiff may have changed his/her position in reliance on the promise of the defendant.

where a plaintiff can’t prove they would have made a profit, then they can’t rely on expectation loss. They must therefore use reliance loss, where they get damages that put them back in the position they were before the contract

Question 15

what are the facts of Angelia Televsion ltd v Reed

Answer 15

Robert reed was a movie star hired to do a film. The company spent money before hiring him in preparation of the movie being made. Then they spent more money on the film once he was hired before he left it and breached the contract.

Plaintiff was entitled to recover the expenditure it incurred after they signed reed but they were also entitled to recover the expenditure from before he signed, as he was aware that if he left, they would lose the expenditure spent

Question 16

aggravated damages

Answer 16

aggravated damages are awarded to a plaintiff as additional compensation in recognition of particular features which have exacerbated the wrong

Question 17

exemplary damages

Answer 17

exemplary damages also known as punitive damages are awarded against a wrong doer after full compensation has already been assessed for the harm caused.

They are intended to punish the wrongdoer for a particularly egregious conduct and to provide additional deterrence

Question 18

Restitution loss

Answer 18

Usually awarded for unjust enrichment

Question 19

what are the facts if Hickey v Roches Stores?

Answer 19

They deliberating breached the terms of the contract and continued selling as they thought it would be more profitable

Question 20

damages for emotional stress & other tangible interests

Answer 20

such damages are also referred to as non-pecuninary damages and are usually not allowed, only in exceptional circumstances.

Question 21

what is the policy behind refusal of awarding damages for emotional stress & other tangible interests

Answer 21

In Baltic shipping v Dixon Mason CJ held that the policy behind the refusal of awarding such damages is that compensation for injured feelings will lead to inflated awards of damages in contract cases

Other reasons include:

• It is too harsh on the defendant to have to pay damages for mental distress
• Mental distress is incapable of exact proof
• The risk of mental distress is voluntarily assumed by the plaintiff upon entering into the contract

Question 22

what are the facts of Dinnegan & Dinnegan v Ryan?

Answer 22

Damages for emotional stress were awarded when the publican refused to allow the plaintiff and her wedding guests to enter the pub

Question 23

Mitigation of damages

Answer 23

Mitigation of damages is the principle that the plaintiff may not recover losses that could have been avoided by taking reasonable steps after the breach.

Question 24

what are the facts of the case Cullen v Horgan

Answer 24

Defendant in breach of contract failed to deliver the goods on time. The plaintiff took no steps to find an alternative delivery driver etc so failed to mitigate his loss. Whilst he was entitled to damages, he was under an obligation to source the goods from another supplier once it became clear that the defendant was not going to fulfill his contract

Question 25

what is a liquidated damage clause

Answer 25

A liquidated damages clause is a provision which specifies the amount of money which a defaulting party under a contract is required to pay the other party in the event that the defaulting party fails to perform a particular obligation in accordance with the terms of the contract

Question 26

what is the difference between a liquidated damage clause and a penalty clause?

Answer 26

liquidated damages is a genuine pre-estimate of the damage which the counterparty will suffer due to the breach whereas

penalty clauses is deemed not in proportion with the likely loss and is instead considered to be so significant that it is intended to punish the defaulting party.

Question 27

The primary test of whether a clause is one or the other is that set out by lord Dunedin in Dunlop pneumatic Tyre v New Garage & Motor Company

Answer 27

sum is a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach.

Question 28

what are the facts of Durkan New homes v Minister for the Environment

Answer 28

A clause in the contract for sale contained a clause whereby the defendant was required to pay an ascending scale of damages from 20,000 to 50,000 per week for delays between the proposed closing and the transfer. The court held this to amount to a penalty clause

Question 29

Recission?

Answer 29

The remedy for rescission is commonly used for: duress, undue influence, unconscionability and fraudulent misrepresentation. There must be pratical justice in returning the parties to a situation identical to that which they would have been if the transaction had never occured.