Remedies Flashcards
Types of remedy in contract law
Legal remedies - available as of right. Can be compensatory damages
Equitable remedies - discretionary
Remedies under a specific statute
Compensatory damages - nominal damages
Staniforth v Lyall - No loss suffered
Experience Hendrix LLC v PPX Enterprises - no loss was suffered but a reasonable payment was made for use of master recordings
Wrotham Park v Parkside Homes - damages used as demolishing would be unfair to 3rd party, estimate at cost of releasing restrictive covenant was given as damages even though this wouldn’t have been accepted
Compensatory damages - speculative damages
Usually a matter for tort however in some cases damages are awarded based on loss of amenity etc
Chaplin v Hicks - awarded damages based on % chance of her getting role
Ruxley Electronics v Forsyth - pool was 10% shallower. Received £2500 for loss of amenity even though this was NBD.
Causation and remoteness of damage
Must prove breach caused the loss, not just provided the opportunity for it. “But for”
Hadley v Baxendale - remoteness of damage test. Carrier did not know the importance of prompt delivery.
1. What loss is a natural consequence of the breach?
2. Did the party know the importance of not breaching?
Victoria Laundry
1. Recoverable loss should be measured against a test of reasonable foreseeability
2. Foreseeability of loss is dependent on knowledge at the time contract was made
4. Knowledge is of two types, common knowledge and actual knowledge
Knowledge can be invoiced on the basis of what the reasonable man should know, decided in Czarnikow v Koufos and confirmed in H Parsons.
Loss of a bargain / expectation loss
Idea is to place claimant in the same financial position they would have been if the contract was properly performed.
1. Difference in value between goods / services required and those provided
Bence Graphics v Fasson - cost of replacing decals was awarded
2. Where there is a market, damages will be the difference between the contract price and market
Charter v Sullivan - car could be easily resold so only nominal damages
W L Thompson v Robinson Gunmakers - supply exceeded demand for the car so damages were awarded for loss of profit
3. Not just for goods, also services
Victoria Laundry v Newman Industries
4. Loss of a chance
Chapman v Hicks
Puts claimant in position they would be if contract was performed
Reliance loss (wasted expenditure)
Anglia Television v Reed - may recover expenses spent in advance of contract breached
Farley v Skinner - can recover damages for loss of amenity (aircraft noises)
Puts claimant in lotion they would be if contract was never made
Restitution
Repayment of any money or other benefits passed to defendant in advance of breach
Duty to mitigate loss
British Westinghouse Electric v Underground Electric Railways - where a replacement is better, damages may be reduced
White and Carter v McGregor - claimant only has to do what is reasonable to mitigate loss, and can carry on with contract rather than anticipatory breach
Thai Airways v K I Holdings - leased plains were more fuel efficient so no damages were required as cost equalled out
Liquidated damages meaning
Where amount of damages has been fixed by a term in the contract
Courts only accept this if it is accurate and proper, otherwise it will be seen as a penalty and unenforceable.
First penalty test
Dunlop Pneumatic Tyre v New Garage and Motor - an extravagant sum will always be a penalty
- payment of a large sum for failure to settle a small debt is probably a penalty
- a single sum operating in respect of various breaches is probably a penalty
- the wording used by parties is not necessarily conclusive
- it is no bar to recovering a liquidated sin that actual assessment of the loss was impossible before the contract
Updated penalty test
ParkingEye Ltd v Beavis
Must be able to show that the clause it to protect a legitimate interest and JD not exorbitant or unconscionable
- applies to commercial and consumer
- party seeking to rely on term does not need to have suffered loss
- term can only apply to condition, not warranty
Where are quantum meruit damages found
In a contract for services where no price is stated
Where circumstances of the case show that a fresh agreement can be implied in place of the original one
Where a part has elected to consider the contract discharged by the others breach
Equitable remedies
Awarded where damages are inadequate and wouldn’t serve justice
Not a right
- Specific performance
Not available
- where damages would be appropriate because there are substitute goods,
- for contracts involving personal services and employment (Page One Records v Britton )
- where the court cannot supervise the enforcement
- impossibility or illegality
- where claimant is unsure whether they can perform their side of the dirt
- where there is excessive delay
- where claimant has been dishonest or unconscionable - Rescission
Returning to position before contract was made
Termination of contract for breach
At common law, breach can result in terminating the contract where
- there is a breach of a condition or innominate term construed as a condition
- one party refuses to perform his or her obligations or a substantial part, including anticipatory breach
One party makes it impossible to perform the contract
Rights against the goods
Sale of Goods Act 1979 - Lien. Right to retain possession until debtor has paid.
CRA 2015
S20 short term right to reject
S23 right to repair or replacement
S24 right to price reduction or final right to reject
