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Contract Law > Remedies > Flashcards

Remedies Flashcards

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1
Q

Are damages meant to be punitive?

A

No

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2
Q

How are damages calculated?

A

Put the innocent party in position they would have been had contract been properly performed

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3
Q

What are the types of damages?

A
  1. Expectation Interest
  2. Reliance interest
  3. Non-monetary Losses
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4
Q

What is expectation interest?

A

Restitution (put in place had contract been performed)

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5
Q

How is expectation interest calculated?

A
  1. How much it would take to cure the defects; or
  2. Difference in value between what was actually provided and what should have been provided
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6
Q

When is reliance interest used?

A

When expectation interest damages are too speculative to measure (not sufficiently certain)

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7
Q

What is reliance interest?

A

Compensation for expenses incurred in reliance on contract up to the time of breach to put parties back in position had they never contracted

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8
Q

Can damages be awarded for non-monetary loss?

A

Yes, for physical injury if loss is not too remote from breach of interest

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9
Q

Can damages be awarded for mental distress?

A

No

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10
Q

What is the exception to the rule that damages are not awarded for injury to feelings?

A

Loss of amenity (for holidays etc) of a consumer
Loss of reputation

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11
Q

When are damages assessed as a general rule?

A

At the date the contract is breached

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12
Q

If the innocent party was not aware of the breach when it occured, are damages still assessed at the time of the breach?

A

No

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13
Q

What is the rule for remoteness of damages?

A
  1. Damages awarded fairly and reasonably considered to arise naturally from breach OR
  2. Damages awarded have been in reasonable contemplation of both parties as a probably result of breach
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14
Q

When is remoteness assessed?

A

At time contract is entered into, not at time of breach

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15
Q

Explain causation in damages?

A

Liable party is only liable for losses caused by their breach “effective cause” of the loss

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16
Q

In contract, will an intervening event that could reasonably have been expected still break the chain of causation?

A

No

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17
Q

if a breach is one of two effective causes of a loss, will the breaching party still be liable?

A

Yes

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18
Q

When does contributory negligence arise in contract law?

A

When there is a duty of care like under the Supply of Goods and Services Act or the Consumer Rights Act

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19
Q

When does an innocent party have contributory negligence in contract?

A

When liability is the same both in contract and in tort (duty in tort even if there was no contract)

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20
Q

When looking at expectation interest, how are damages calculated?

A
  1. Dimunition in value
  2. Cost of remedying defect
  3. Value of loss of amenity
21
Q

Under the Sale of Goods Act, how are damages calculated?

A

Damages is the measure of loss or estimated loss resulting directly and naturally from breach of contract

If there is a market for the goods, the starting point is the difference between the contract price and market value of the goods

22
Q

Explain mitigation?

A

Innocent party must take reasonable steps to mitigate (minimise) loss

No recovery for losses that are a direct consequence of a failure to mitigate

23
Q

What is a liquidated damages clause?

A

Clause quantifying as a pre-estimate, damages/loss without having to prove the loss

24
Q

When is a liquidated damages clause valid?

A

If it is a genuine pre-estimate of innocent party’s loss

25
Q

What are penalty clauses and are they enforceable?

A

Penalty clauses impose a penalty for breach that is out of proportion of the obligation breached

Unenforceable

26
Q

When will a penalty clause be enforced?

A

Never, unless you can prove that:

  1. Protects legitimate business interest
  2. Charge is proportionate to protect the interest
  3. Compensatory, not punitive
27
Q

Why are indemnities useful?

A

Allows an innocent party to recover without limitations of rules on remoteness, mitigation or causation

28
Q

What is a guarantee?

A

Promise by guarantor to ensure that another person who is a party to a contract, performs their obligations (like pay a debt)

29
Q

What are the rules for how a guarantee should take form?

A

Must be written

30
Q

How is a guarantee different from an indemnity?

A

Guarantee = secondary obligation of a primary obligation
Indemnity = primary obligation

31
Q

What happens if the primary obligations to which a guarantee relates are changed>

A

The guarantee falls away

32
Q

Under a guarantee, can the guarantor rely on defences available to the primary obligor?

A

Of course

33
Q

What is the difference between a claim for damages and a debt claim?

A
  1. No need to consider remoteness or causation
  2. No duty to mitigate
34
Q

What are the equitable remedies?

A
  1. Specific Performance
  2. Injunction
  3. Rescission
35
Q

When is specific performance granted?

A

When damages is not an adequate remedyW

36
Q

What special circumstances is specific performance guaranteed as a remedy?

A
  1. Sale of goods under sale of goods act 1979
  2. Sale of land
37
Q

When is specific performance not granted?

A
  1. Undue hardship on breaching party
  2. Consideration for performance is inadequate
  3. No mutuality (i.e. innocent party has obligations of their own)
  4. Employment or personal services contract
  5. Supervision of court is needed
38
Q

What is an injunction?

A

Compels a party to not breach the contract

39
Q

When is injunction typically granted?

A

When a contract has a negative term (promise not to do something)

40
Q

What is rescission?

A

Cancellation of a voidable contract

41
Q

What is the effect of rescission?

A

Parties are left as though they never contracted

42
Q

When must the grounds for rescission have been present?

A

Before or at the time of the contract

43
Q

What are the defenses to a claim for an equitable remedy?

A
  1. Unconscionable behavior by claimant (claimant does not have clean hands)
  2. Waiver
  3. Unreasonable delay in enforcing the claim (laches) - delay defeats equity
44
Q

What remedies are available under the Consumer Rights Act, 2015 ?

A
  1. Return defective goods within 30 days for full refund
  2. If no return, or 30 days expire, repair or replacement at traders expense; or
  3. If repair/replacement not successful or too expensive or can’t be carried out in reasonable time and without unreasonable inconvenience, reduction in price or rejection of goods for full refund
45
Q

What are restitution remedies?

A

Non-contract law remedies preventing unjustified enrichment

46
Q

When is restitution available?

A

Once contract has been set aside and when other remedies are not adequate

47
Q

What are the requirements for unjustified enrichment claims?

A
  1. Legitimate interest in preventing the other party from keeping the profit
  2. The party must habe been unjustly enriched
  3. Must be at expense of other partyW
48
Q

What are the restitution remedies?

A
  1. Return money or property
  2. Monetary award (quantam meruit) for payment of services provided or goods (quantum valebat)
49
Q
A

Contract Law (14 decks)

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