Remedies Flashcards
Damages - Principle
Breach of any terms gives the innocent party the right to claim damages.
The injured party should be out into the position they would have been in if the contract had been carried out. Usually awarded for expectation loss or reliance loss
Calculation of damages - Expectation Loss - Aim
Basically loss of a bargain. Aims to put the innocent party in the position they would have been in if the contract had been performed.
Calculation of damages - Expectation loss principle
Difference between what he expected had the contract been performed properly and what he actually received. Includes defective goods - difference in value between actual value and the value the goods would have had if they had not been defective
Calculation of damages - Expectation loss - Cost of cure
Amount of damages awarded will be the cost of putting the work right
Calculation of damages - Loss of amenity
General rule - claimant cannot recover damages for injured feelings.
Exception - where the object of the contract is to afford pleasure
Calculation of damages - Reliance loss - Principle
Basically wasted expenditure. Damages to cover the expenses incurred in reliance on the contract. Worked out on a reliance loss basis.
Calculation of damages - Reliance loss - Aim
Aims to place innocent party in position if contract had never been made.
Calculation of damages - Action for an agreed sum
If the contract provides that one party shall pay a definite sum of money to the other, then if the duty to pay has arisen but the payer refuses to pay, the payee can bring a claim for the agreed sum.
Duty to pay must have arisen - 21 days.
Calculation of damages - Non-pecuniary loss
Damages for lost opportunity - loss of chance.
Injury to feelings, mental distress and loss of amenity
Only applicable to contracts where the essence of the contract is to provide pleasure
Penalty clause
An attempt to put pressure on a party to perform the contract.
Unenforceable
Specified damage clause
A genuine attempt to pre-estimate the loss which is likely to be caused by the breach. It is binding and the sum specified is the amount that will be paid regardless of the actual loss which the claimant suffered
Specific performance - Definition
Can be combined with a claim of damages. An order of the court which requires a party to perform their contractual obligations.
Specific performance - Restrictions
Unlikely to get it where subsequent goods are adequate compensation. Not usually used for employment services. Such contracts usually depend on a certain amount of trust and confidence. Will not grant specific performance for personal services
Injunctions - Mandatory injunction
Requires a person to put right a breach of contract. Equitable remedy and is available at the discretion of the court
Injunctions and specific performance
An injunction will not be granted if the effect would be to compel the defendant to do acts which he could not have been ordered to do by specific performance
Injunctions - when they won’t apply
They will not apply in relation to services contracts - employment contracts. However a contract may contain a negative promise which can be enforced without directly compelling the employee to work for the employer
Injunctions - enforcing party not to work for someone else
Court will consider such matters as:
- Length of time - if the injunction will last for only a relatively short time it is more likely to be awarded
- Whether granting the injunction will have the effect of seriously affecting the party’s career
Will not be awarded if the court feels that the inevitable result would be to compel the party to work for the original employer
Remoteness
Hadley v Baxendale - test of foreseeability. Loss will only be recoverable if it was in the contemplation of the parties
Indemnity
Promise by one party to compensate another for loss suffered as a consequence of a specific event. Creates a primary obligation and does not need to be evidenced in writing.
Liquidated damages clause
A contractual provision requiring a party in breach to pay a pre-determined amount to the other party as compensation for the breaching party’s failure to perform a specific task or comply with a particular duty or obligation
Innominate terms
If there is a breach they can always recover damages. Will only give rise to a right to terminate if the breach has substantially deprived the innocent party of the benefit of the contract.
Contract has come to an end
If the contract has come to an end then there is no contract to terminate so you can only claim damages
Payment in advance
If someone pays money in advance then they have received no consideration so they can claim back all of that money and any more based on expectation loss.
Breach of a restrictive covenant - Remedies
e.g not to compete with a business. If you breach this then the person breaching cannot sue the other party for the negotiating damages in relation to this breach. Negotiating damages will only be awarded where there is no financial loss other than the chance to negotiate a release fee
