Remedies Flashcards
What are the main remedies available for breach of contract?
- common law remedy (damages)
- equitable remedies (I, SP, R, R)
- Statutory remedies (4 R’s for goods, repeat performance for services)
OR
Repudiation (terminate contrat)
Are damages considered to be compensatory or a punishment?
Given that contract damages are traditionally intended to be compensatory, rather than imposed as a punishment, nominal damages of a few pounds or even pence may be awarded in situations where there has been a breach of contract but the loss is minimal or non-existent.
If the court thinks that the claimant was technically correct in bringing a claim but was wasting everyone’s time by suing, they may get contemptuous damages, such as one penny.
What are the two main heads of damages?
- Pecuniary damages (loss of bargain/expectation loss and reliance loss
- Non-pecuniary damages (mental distress, sometimes incl. physical inconvenience)
Explain the 4 types of pecuniary damages?
1) Loss of bargain/expectation loss: puts the claimant into the position (financially) they would have been.
2) Loss of amenity: when actual loss is difficult to access/quantify, loss of enjoyment, e.g. swimming pool not deep enough.
3) Speculative losses: when courts have to estimate what the claimant may have received if the contract had been honoured, e.g. job interview.
4) Reliance loss: sums spent by the injured party in reliance on the other party fulfilling their obligations, e.g. film star pulling out.
What is the market price rule?
In the sale of goods cases, for example, damages will often be the difference between the agreed contract price and the actual market price on the day on which the goods should have been delivered; the court aims to give the injured party what they should have had and therefore compensates for the cost of replacement.
If the price of the goods has gone down and the buyer can find them more cheaply, their damages will be nominal. This is sometimes referred to as the market price rule.
What are the 3 types of mental distress that are able to be claimed as non-pecuniary damages?
Damages can be awarded for mental distress:
- where a predominant object is for mental satisfaction (e.g. holidays).
- where physical inconvenience has been suffered (Watts v Morrow, surveyor, defects in property)
- where the breach has cause the loss of pleasurable amenity which was an important object of the contract (Farley v Skinner, surveyor and aircraft noise)
If a claimant is to be awarded damages, what 4 things must they show?
- a breach of contract
- the breach caused the loss
- loss was not too remote
- attempts to mitigate the loss
Which situation is too remote to get damages?
Hadley v Baxendale concerned a miller whose mill had a broken crankshaft. He asked the defendant, a carrier, to take the shaft to the makers so that they could use it as a model for a new one and the defendant promised to do this the next day. He actually took a week to deliver it and as a result, the mill was idle and lost profit. The claimant sued for loss of profits. It was held that the defendant was not liable because this loss was not reasonably foreseeable and he did not know (because the claimant had not told him) that there was no spare and the mill could not work without the crankshaft.
By contrast, in The “Heron II” [1969] a ship was chartered to carry sugar to Basrah. The ship arrived late and, when the charterers sold the sugar, the price had dropped. The House of Lords held that the shipowners were liable for the loss because they knew that there was a sugar market in Basrah and should have anticipated that prices would fluctuate, affecting the charterers.
What is the two limb test formed in Hadley v Baxendale?
Limb One: Direct Losses (losses that may fairly and reasonably be considered as arising naturally from the breach)
Limb Two: Special Losses (losses that may reasonable be supposed to have been in the contemplation of both parties at the time they made the contract - they had been warned about the special circumstances)
However, these rules should not be followed if they will produce an outcome that does not reflect the expectation or interaction which the parties could reasonably be said to have had.
The “Achilleas” [2008]
Supershield Ltd v Siemens Building Technologies FE Ltd [2010]
What is the mitigation of loss rule?
The claimant must keep their losses to a minimum and can’t claim any loss that could have reasonably been avoid. E.g. seller must find another buyer ASAP.
However, if seller delays reasonably, believing price to go back up, buyer will be liable for all losses.
All goes back to the seller acting reasonably.
When will specific performance not be ordered?
- When damages would be an adequate remedy, i.e. needs to be a unique item to do specific performance like Mona Lisa or a house.
- Or if the courts would have to get involved in the constant supervision of the remedy.
- Or for personal services, like employment
- principle of mutuality
- the claimant must have conducted themselves properly
When will an injunction not be ordered?
- When damages would be an adequate remedy.
- Forcing the performance of a personal services contract, as that is an indirect way of ordering the specific performance of a personal service contract.
For example, in Page One Records v Britton [1967] the Troggs pop group had a five-year contract with an agent. When they broke the contract, the court would not grant the agent an injunction preventing the group from using another agent, because this would effectively have forced the group to use the original agent. He obtained damages instead.
In the Consumer Rights Act 2015, what are the 3 steps available as remedies for goods contracts?
ss20-22: short term right to reject (30 days)
s23: replacement or repair
s24: price reduction or long term right to reject (6 years, but no loss of money until 6 months apart from vehicles)
(s19: can also use damages, SP, repudiation etc, as well as or instead, but can’t recover more than once for the same loss)
In the Consumer Rights Act 2015, what are the 3 steps available as remedies for service contracts?
s55: right to repeated performance (see s49 reasonable care and skill)
s56: right to price reduction (where repeated perf is not possible or s52 in reasonable time, can get reduction)
(s54: can also use damages, SP, repudiation etc, as well as or instead, but can’t recover more than once for the same loss)
In the Consumer Rights Act 2015, what are the 3 steps available as remedies for digital contracts?
s43: right to repair or replacement
s44: right to price reduction (when repair cant be carried out)
s45: right to a refund (only used when trader is selling something they have no right to sell)
(s42: alternative remedies available)
