Remedies Flashcards
What is the nature of damages?
Damages intended to put the claimant in the position they would have been in were it not for the breach. Not the aim to punish the D. If D has not actually suffered any loss, damages are only nominal (symbolic to say there was a breach, eg £1).
Methods of calculating damages: (1) expectation interest or (2) reliance interest.
What is the Expectation Interest?
Must not be highly speculative.
Cost of cure = contracts involving defective works, what is the cost of repairing or replacing the defective work. Claimant must act reasonably and cannot redo works merely for aesthetic reasons.
Diminution in Value = difference in value between performance received and that promised in the contract.
Loss of amenity = where expense of repair disproportionate and no real diminution in value (Ruxley). Reflects non-economic loss of enjoyment and pleasure in not getting what they contracted for. Not typically used in commercial setting.
What is the reliance interest?
Losses incurred prior to breach only.
Allows claimant to recover expenses incurred in preparing for, or in part performance of, the contract which have been rendered pointless by breach (e.g framing a painting).
Allows only for wasted expenditure, not expenditure generally.
Loss must flow from breach, not from making a bad bargain (e.g C would have made loss with or without breach as he carried out extensive works on a short-term rented property).
What are the different types of loss?
Mental Distress = general rule that damages will not be awarded for mental distress, anguish or annoyance caused by breach. Exception where contract whose whole purpose or major object was pleasure, relaxation and peace of mind.
Loss of Reputation = no damages unless financial loss as a result.
Loss of Chance = recoverable if quantifiable in monetary terms + there is real and substantial chance that opportunity might have come to fruition. Usually courts will award this even if quantification of loss not straightforward. e.g loss of chance of winning. Where 50%+ chance, should seek to recover expectation loss in full.
What is the test for causation?
causal link between D’s breach of contract and its loss.
Factual = whether breach by D has, as a matter of fact, caused the loss suffered by the claimant. Breach should be dominant or effective cause of loss
Legal = novus actus interveniens, if novus actus was likely to happen then will not break chain of causation.
What is the test for remoteness?
Not all losses flowing from breach are recoverable. Only:
(1) those fairly and reasonably considered as arising naturally from the breach itself.
(2) such as may be reasonably have been in contemplation of both parties at the time they made the contract as a probable result of the breach
Different Test for Remoteness (specific industries)
Has D in objective terms assumed responsibility for the loss in question?
What is mitigation?
Injured party should take reasonable steps to minimise the effect of the breach. No obligation to do so, but losses attributable to failure to mitigate are not recoverable.
No need to embark on complicated litigation but may have to accept new contract with D for short period if this is most cost effective.
What is the restitution interest?
Represents the interest a claimant has in restoration of benefits which defaulting party acquired at their expense. Account of profits.
D may have to account for profits in exceptional circumstances where damages, injunction or specific performance are inadequate + court has regard to all the circumstances.
Generally, C can recover if they have a legitimate interest in preventing the D’s profit making activity and depriving him of his profit. Efficient breach alone does not justify this.
Used only really for national security (Blake). Egregious breach of terms known to be fundamental and strictly non-negotiable. Occurs where there is a total failure of consideration to reverse unjust enrichment.
Remedies under CRA 2015
For all breaches, right to repair or replacement is available unless repair or replacement is either impossible or disproportionate.
Right to price reduction or final right to reject is only available where repair/replacement is impossible, disproportionate, tried once and goods still don’t conform or trader has failed to repair/replace within reasonable time without significant inconvenience to the consumer.
Where final right to reject exercised within 6 months, there should be full refund with no deduction for use (except for motor vehicles).
Remedies under CRA 2015: goods
For breach of s 9 (satisfactory quality), s 10 (reasonably fit for particular purpose) or s 11 (correspondence with description), goods are regarded as non-conforming.
Short term right to reject available to consumer for 30 days from ownership/possession passing + goods delivered or installed & consumer notified.
Right to repair or replacement
Right to price reduction or final right to reject.
Remedies under CRA 2015: digital media
Digital content not conforming within 6 months beginning on day of supply taken to not conform on day supplied.
Right to repair / replacement.
Right to price reduction.
Right to refund where trader had no right to supply the digital content. Refund within 14 days.
Where damage to other device or digital content + damage would not have occurred if trader exercised reasonable care and skill, consumer entitled to repair or compensation.
CRA 2015: services
Right to require repeat performance within reasonable time and without significant inconvenience if possible.
Right to price reduction.
What is a liquidated damages clause?
Parties can agree a limit to the damages recoverable on breach of contract. Court will uphold such agreements unless they amount to a penalty.
What is a penalty clause?
Where a liquidated damages clause requires a party in breach to pay an excessive sum, such that it becomes a penalty, and therefore the clause will not be upheld.
