Remedies Flashcards
What is the principal remedy for breach?
Damages
Purpose and ways of calculating damages?
EXPECTATION INTEREST
Compensating – to put in position should HAVE BEEN if contract was performed.
Methods of calculating expectation interest.
- Cost of cure - standard mechanism. Unless unreasonable.
- Diminution in value
- Loss of amenity NOT AVAILABLE IN COMMERCIAL COTEXT.
RELIANCE INTEREST
- Backwards looking - recover expense that have been incurred in preparing for in part of performance of the contract.
- Haven’t got any gains they would have got
- Gets you back expenses
- Become important if expectation cost is highly speculative
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Restitution interest
interest a claimant has in the restoration to them of benefits which the defaulting party has acquired at their expense.
- This is in exceptional cases.
- Where breach was cynical and deliberate
- Enables defendant to enter into a more profitable contract elsewhere
- By entering into a new more profitable contract, defendant put it to of his power to perform the contract with the claimant.
Types of loss?
Damages for metal distress
- General rule is that it will not be awarded in relation to mental distress or anguish.
- Exception – where major object of contract was to provide pleasure,
Damages for loss of reputation
- General rule is not awarded.
Dmaages for loss of chance
- Loss of an opportunity is recoverable in damages if the lost chance is quantifiable in monetary terms.
Damages on behalf of another
- General rule – cannot be recovered on behalf. Exception is those of privity to contract.
Limitation factors to damages?
Causation
- Must establish a casual link
- Whether breach by defendant has caused the loss suffered by the claimant. (factual causation) – common sense approach
- Whether as a matter of law they should be responsible (legal causation) – if there is a novus actus intervenient
Remoteness
- Not all losses flowing are recoverable
- Foreseeable
- Losses that are likely to flow from breach of the type of contract or that specific contract itself.
Mitigation
- Injured party should take reasonable steps to minimise effect of breach – technically no obligation to mitigate
Remedies under CRA 2015 for goods?
Contracts for goods
- For goods that are non-nonconforming CRA s9,10,11, there are 3 remedial options.
- Short term right to reject – usually in 30 days
- Right to repair or replacement – available unless impossible or disproportionate
- Right to a price reduction – only exercises after the repair or one replacement the goods do not conform to the contract
Remedies under CRA 2015 for digital media?
- S42 digital media where non-conforming
- Right to repair or replacement – do either within a reasonable time and without significant inconvenience to the consumer.
- Right to price reduction – exercisable only when consumer either cannot require repair or replacement
- Right to refund – where trader has no right to supply the digital content – refund must be given within 14 days
Remedies under CRA 2015 for contracts for service?
- Right to require repeat performance – within a reasonable time and without significant inconvenience to consumer.
- Right to price reduction – where repeat performance is impossible or not in time.
What is a liquidated damages clause?
Liquidated damages clause – stipulates a certain sum which is to be payable on particular breach of contract.
Court intervention in liquidated damages clause?
- Many instances where courts can strike down liquidated damages clauses which requires a party to pay an excessive sum such that it becomes a penalty.
- Penalty clause – an excessive sum – clause will be struck out and NOT UPHELD.
- Clause will be secondary if obligation is trigger by breach of party.
- If secondary clause will be a penalty if it imposes a detriment out of all proportionate to any legitimate interest of innocence party in performance of primary obligation. BURDEN OF PROOF ON PERSON ALLEGING THAT THE CLAUSE IS A PENALTY
Specific performance and prohibitory injunctions?
NEITHER WILL BE GRANTED IF DAMAGES IS ADEQUATE.
To show its inadequate need to show that subject matter is unique or
Guarantees and indemnities?
Guarantee – a promise by a party to ensure that another party carries out its obligations, or a promise to fulfil those obligations itself if other party does not do so.
It creates a secondary obligation which only arises once the person has first or used a claim against the original party
- If there is a change to contract – a guarantee will be discharged whilst an indemnity will stay
If the terms of original agreement are unenforceable then the gurantee is also unenforceable.
Indemnity – a promise to reimburse someone in the event that they suffer a stated loss.
This is a primary obligation.