Remedies

Question 1

What is the aim of an award of damages based on the expectation interest in contract law?

(a) 
It is aimed at depriving the party in breach of contract of a gain that they have made at the innocent party’s expense

(b) 
It is aimed at putting the innocent party in the position they would have been in had the contract been properly performed
(d) 
It is aimed at compelling actual performance of the primary obligations under the contract

Answer 1

(b) 
It is aimed at putting the innocent party in the position they would have been in had the contract been properly performed.

It is the default approach to compensating the innocent party for the losses they have suffered as a result of the breach of contract


Question 2

Which of the following is not a mechanism for calculating expectation interest?

(a) 
Loss of reputation

(b) 
Loss of amenity

(c) Diminution of value

(d) 
Cost of cure

Answer 2

(a) 
Loss of reputation


Question 3

What is the aim of an award of damages for breach of contract?

(a) 
An award of damages is aimed at punishing the party who is in breach of contract

(b) An award of damages is aimed at compensating the innocent party for the damage or loss they have suffered as a result of the other party’s breach of contract

(c) 
An award of damages is aimed at correcting the party who is in breach of contract

(d) 
An award of damages is aimed at avenging the innocent party for the other party’s breach of contract

Answer 3

(b) An award of damages is aimed at compensating the innocent party for the damage or loss they have suffered as a result of the other party’s breach of contract


Question 4

In what circumstances will damages for loss of chance be awarded?

(a) 
Damages for loss of chance will be awarded where the likelihood of the opportunity being realised is greater than fifty percent

(b) 
An award of damages is aimed at correcting the party who is in breach of contract

(c) Damages for loss of chance will be awarded if the defendant has acted in an unreasonable and unconscionable manner

(d) 
Damages will be awarded for loss of chance if the lost chance is quantifiable in monetary terms and there was a real and substantial chance that the opportunity might have come to fruition

Answer 4

(d) 
Damages will be awarded for loss of chance if the lost chance is quantifiable in monetary terms and there was a real and substantial chance that the opportunity might have come to fruition

Question 5

What is the test for factual causation in contract law?

(a) 
The test is whether the defendant’s actions were foreseeable

(b) 
The test is whether the defendant’s actions were the only reason for the loss

(c) 
The test is whether the defendant’s actions were a dominant or effective cause of the loss

(d) 
The test is whether the defendant’s actions were likely to happen

Answer 5

(c) 
The test is whether the defendant’s actions were a dominant or effective cause of the loss


Question 6

Which of the following is the most accurate summary of the description of damages which are not too remote, as per Hadley v Baxendale?

(a) 
Those damages which were reasonably foreseeable.

(b) 
The damages which the party in breach should reasonably have contemplated as arising from a breach of contract, and those damages which both parties understood would flow from a breach at the time the contract was entered into.

(c) 
The damages which arise naturally according to the usual course of things from the breach, or those which the parties contemplated at the time they made the contract would probably be caused by a breach of contract.

(d) The damages which the contract made clear would flow from a breach, or which were known to probably flow from a breach at the time the contract was entered into.

Answer 6

(c) 
The damages which arise naturally according to the usual course of things from the breach, or those which the parties contemplated at the time they made the contract would probably be caused by a breach of contract.


Question 7

What happens if a claimant fails to mitigate their losses following a breach of contract by the other party?

(a) 
By failing to mitigate their losses, the claimant will themselves be in breach of contract thus liable to pay damages to the defendant

(b) 
The claimant will not be able to recover any of the losses they have suffered

(c) 
The claimant will not be able to recover the losses attributable to the failure to mitigate
(d) 
The amount of damages that the claimant can recover for the breach of contract will be reduced on account of their failure to mitigate

Answer 7

(c) 
The claimant will not be able to recover the losses attributable to the failure to mitigate

While there is no duty to mitigate one’s losses, the claimant will not be able to recover losses which are due, not to the breach itself, but their own failure to behave reasonably after the breach


Question 8

What principle emerged from the court’s decision in C & P Haulage v Middleton regarding reliance interest?

(a) 
Reliance interest puts the innocent party in a better position than he would have been in had the contract been performed

(b) Reliance losses are incurred as a result of the breach of contract

(c) 
An innocent party cannot recover expenses that would have been wasted whether or not the breach of contract occurred
(d) 
Reliance interest is awarded to compensate an innocent party for losses resulting from having made a bad bargain

Answer 8

(c) 
An innocent party cannot recover expenses that would have been wasted whether or not the breach of contract occurred

The claimant was unable to recover the money he spent improving the premises as he was unable to show that he would have been able to recoup that expenditure had the contract not been breached.
Regarding the other options, it should be noted that reliance losses are incurred prior to the breach of contract and they are intended to put the claimant in the position he would have been in had he not entered into the contract.
The decision in C & P Haulage v Middleton confirms that reliance interest is not recoverable where the claimant’s losses are as a result of having made a bad bargain


Question 9

Under what circumstances will a remedy of an account of profits be awarded for a breach of contract?

(a) 
Where the breach puts the claimant in a worse financial position compared to if there had been no breach

(b) 
Where the defendant breaches a duty of confidentiality

(c) 
In exceptional circumstances where traditional remedies are inadequate
(d) 
Where the breach has enabled the defendant to enter into a contract elsewhere

Answer 9

(c) 
In exceptional circumstances where traditional remedies are inadequate

Lord Nicholls’ decision in the Blake case shows that the inadequacy of other remedies is key to the award of an account of profits. A further requirement is that the claimant must show that they have a legitimate interest in depriving the defendant of his profit


Question 10

Which of the following is not a remedy available to a consumer under the Consumer Rights Act 2015 where the goods supplied are non-conforming?

(a) 
The right to a price reduction or the final right to reject

(b) 
The right to repeat performance
(c) The short-term right to reject

(d) 
The right to repair or replacement

Answer 10

(b) 
The right to repeat performance

The right to repeat performance is not available when goods supplied are non-conforming. The right to repeat performance is available when services standards are breached.


Question 11

What is the time limit under the Consumer Rights Act 2015 for exercising the short-term right to reject goods that are non-conforming?

(a) 
30 days
(b) 
28 days

(c) 
60 days

(d) 
14 days

Answer 11

(a) 
30 days

Section 22(3) of the 2015 Act states that the short-term right to reject non-conforming goods is available to a consumer for 30 days running from the time that: (i) ownership has passed (or, in the case of contracts for hire or the like, possession has been transferred) and (ii) the goods have been delivered and (iii) in cases where the trader is required to install the goods or to take other action to enable the consumer to use the goods, the trader has notified the consumer that the required steps have been taken


Question 12

What remedy is available to a consumer under the Consumer Rights Act 2015 where the digital content supplied is non-conforming and it is impossible to replace it?

(a) 
The consumer has a right to require repeat performance

(b) The consumer has a right to repair of the digital content

(c) 
The consumer has a right to reject the digital content

(d) 
The consumer has a right to a price reduction

Answer 12

(d) 
The consumer has a right to a price reduction

S.44(3)(a) of the 2015 Act provides that a consumer has a right to a price reduction because of S.43(3)(a) of that Act ie where the consumer cannot require the trader to repair or replace the digital content if that remedy is impossible


Question 13

What is a liquidated damages clause?

(a) 
A clause commonly used in the hospitality industry which sets out the amount of damages that a court should award an innocent party in the event of breach of contract

(b) 
A clause that stipulates the payment of an exorbitant sum of money by a party who is in breach of contract

(c) 
A clause which stipulates a certain sum of money which is payable in the event of a particular breach of contract

(d) 
A clause which deprives an innocent party of compensation when the breach of contract is minor

Answer 13

(c) 
A clause which stipulates a certain sum of money which is payable in the event of a particular breach of contract


Question 14

What happens if a court finds that a liquidated damages clause is a penalty?


(a) The contract will be rescinded, and the parties will have to re-negotiate terms that meet the requirements of the law

(b) 
The liquidated damages clause will be struck down and the court will substitute a valid liquidated damages clause in its place

(c) 
The claimant will be entitled to enforce the penalty against the party that is in breach of contract

(d) 
The liquidated damages clause will be struck down and the claimant will be entitled to unliquidated damages assessed by the court using the normal rules of contract law

Answer 14

(d) 
The liquidated damages clause will be struck down and the claimant will be entitled to unliquidated damages assessed by the court using the normal rules of contract law

Question 15

What is a secondary obligation in the context of the judgment in Cavendish Square Holding BV v Makdessi and ParkingEye Ltd v Beavis?

(a) 
It is a contractual obligation that is unenforceable because it is extravagant or unconscionable

(b) 
It is an obligation triggered by breach of contract to compensate the innocent party
(c) 
It is a contractual obligation that is agreed early in the negotiations between the parties

(d) 
It is a contractual obligation that has minor significance

Answer 15

(b) 
It is an obligation triggered by breach of contract to compensate the innocent party

The distinction between a primary and a secondary obligation is of paramount importance when establishing whether a liquidated damages clause is valid or whether it is a penalty. A primary obligation will not engage the penalty rule, whereas a secondary obligation could potentially be a penalty


Question 16

What is an advantage of obtaining a court order for specific performance?

(a) 
An order for specific performance can be obtained in addition to an award of damages

(b) 
Breaching the court order has severe consequences as it can be treated as contempt of court and lead to imprisonment.

(c) 
The respondent is prevented from doing things that were forbidden in the contract

(d) 
An order for specific performance can be used to enforce a promise that is unsupported by consideration

Answer 16

(b) 
Breaching the court order has severe consequences as it can be treated as contempt of court and lead to imprisonment.


Question 17

What is a prohibitory injunction?

(a) 
It is an order restraining a party from breaching a term in a contract which requires him not to do something

(b) 
It is an order compelling a party to perform a certain act

(c) 
It is an order restraining a party from entering into a contract with a certain other party

(d) 
It is an order granted to stop a party from doing something in the future that will cause the applicant harm

Answer 17

(a) 
It is an order restraining a party from breaching a term in a contract which requires him not to do something


Question 18

Which of the following statements is not correct regarding an order for specific performance?

(a) 
Breach of an order for specific performance can be treated as contempt of court and lead to imprisonment

(b) 
It is available to a successful party as of right
(c) 
It is granted in order to compel a party to do something

(d) 
It is granted at the discretion of the court

Answer 18

(b) 
It is available to a successful party as of right

An order for specific performance is an equitable remedy so it is granted at the discretion of the court


Question 19

Which of the following is the best definition of a guarantee?

(a) 
Where Party X gives a guarantee to Party Y, Party X is promising that if Party Y suffers a stated loss, Party X will cover the cost of that loss.

(b) 
Where Party X gives a guarantee to Party Y, Party X is promising that Party Y will do what it agreed to do and/or Party X will carry out that obligation in Party Y’s place if Party Y fails to do so.

(c) 
Where Party X gives a guarantee to Party Y, Party X is promising that Party Z will do what it agreed to do, and/or Party X will carry out that obligation in Party Z’s place if Party Z fails to do so.

(c) 
Where Party X gives a guarantee to Party Y, Party X is promising that if Party Y suffers a stated loss, Party X will cover the cost of that loss, provided that loss is caused by a stated Party (Party Z).

Answer 19

(c) 
Where Party X gives a guarantee to Party Y, Party X is promising that Party Z will do what it agreed to do, and/or Party X will carry out that obligation in Party Z’s place if Party Z fails to do so.


Question 20

Which of the following is the best definition of an indemnity?

(a) 
Party X promises that if Party Y suffers a loss then Party X will cover the loss. The type of loss covered will be defined in the indemnity.
(b) 
Where Party X gives a guarantee to Party Y, Party X is promising that Party Y will do what it agreed to do and/or Party X will carry out that obligation in Party Y’s place if Party Y fails to do so.

(c) 
Party X promises Party Y that Party Z will carry out its obligations, and/or promises to fulfil those obligations itself if Party Z does not do so.

(d) 
Party X promises that if Party Y suffers a loss following Party Z’s default then Party X will cover the loss. The type of loss covered and the identity of Party Z will be defined in the indemnity.

Answer 20

(a) 
Party X promises that if Party Y suffers a loss then Party X will cover the loss. The type of loss covered will be defined in the indemnity.

Note that the answer ‘Party X promises that if Party Y suffers a loss following Party Z’s default then Party X will cover the loss. The type of loss covered and the identity of Party Z will be defined in the indemnity’ does also describe a type of indemnity, but the concept of indemnity is broader, and can include a two-party as well as a three-party situation, which is why this definition is correct.

Question 21

Guarantee vs indemnity

Answer 21

1. Guarantee: change of contract between X and Z will release Y from obligation - indemnity: change in contract between X and Z will not release Y from obligation
2. A guarantee must be in writing and signed by person agreeing to it - indemnity is not subject to any particular formalities
3. In case of guarantee, if X’s obligation ceases, so does Y’s obligations - in indemnity, Y’s obligation remains in place

Question 22

What is the purpose of damages in contract law?

Answer 22

Aim is to compensate C for damage/loss/injury it has suffered as result of D’s breach
Punishing D is not aim

Question 23

What are nominal damages?

Answer 23

C who has not suffered any loss by reason of breach is nevertheless entitled to judgement - but damages recovered will be purely nominal

Nominal damages = token amount (very small amount eg £1), which are awarded to acknowledge that there has been breach of contract in case where no other remedy available

Question 24

What are the three main remedies available in contract law?

Answer 24

Specific performance = requiring D to carry out undertaking exactly according to terms of contract

Injunction = preventing D from doing smth which contract says he may not do

Damages = payment of money - aim to is compensate C for damage/loss/injury it has suffered as result of D’s breach

Question 25

What are the three interests by which damages are assessed?

Answer 25

1. Expectation interest
2. Reliance interest
3. Restitution interest

Question 26

What is the definition of expectation interest and what are the three mechanisms for calculating it?

Answer 26

Default approach means putting innocent part in same position post-breach that they should have been in had contract been performed - expectation interest ie putting them in position they expected to be in - Forward looking

Three mechanisms for calculating:
1. Cost of cure: epresents cost of substitute or remedial work required to put C in position they would have been had contract been properly performed
2. Diminution in value: C’s expectation interest may be calculated by reference to difference in value between performance received and that promised in contract
3. Loss of amenity: reflection of court’s growing willingness to accept that consumer should have available remedy where loss is not economic in value, but nevertheless has value to them

Question 27

What is the definition of a reliance interest?

Answer 27

Allows C to recover expenses which have been incurred in preparing for, or in part performance of, contract which have been rendered pointless by breach

Backward looking and aims to put C in position they would have been in had they never contracted

Reliance losses most likely to become relevant bc courts will not award expectation damages if they’re highly speculative - instead C will be limited to its reliance loss

Reliance interest only allows for recovery of wasted expenditure, not all expenditure

Reliance losses are losses incurred prior to breach, not those incurred as consequence of breach - losses incurred remedying defective performance are not reliance losses

Question 28

What are the three particular types of loss?

Answer 28

1. Mental distress
2. Loss of reputation
3. Loss of chance

Question 29

Can you claim damages for mental distress?

Answer 29

General rule: damages will not be awarded in relation to mental distress, anguish or annoyance caused by breach of contract

However, exceptions have developed to this general rule - in limited circumstances, mental distress can be compensated
- Initially such compensation limited to cases involving contracts whose whole purpose was provision of pleasure, relaxation and peace of mind
- More recently, HL has allowed damages for non-pecuniary loss where major object (not whole purpose) of contract was to provide pleasure, relaxation and peace of mind

Question 30

Can you claim damages for loss of reputation?

Answer 30

General rule is that damages will not be awarded for loss of reputation

Malik: This was based on the fact that contracts of employment contain an implied term of trust and confidence such that the employer is under an obligation to carry out its work in an honest way.

Damages were awarded but limited to C’s financial loss, which was suffered due to inability to obtain alternative employment resulting from breach of this implied term

Question 31

Can you claim damages for loss of chance?

Answer 31

Loss of opportunity recoverable if:
(a) Lost chance is quantifiable in monetary terms and
(b) There was real and substantial chance that opportunity might have come to fruition

Otherwise treated as too speculative

Where chance of winning or obtaining benefit is 50% or greater, C should seek to recover their expectation loss in full and they will succeed if this can be proved on balance of probabilities

Question 32

Can you claim damages on behalf of another?

Answer 32

General rule = damages cannot be recovered on behalf of another party/for losses suffered by another party

There are exceptions to this rule

Question 33

What does C have to establish for causation in contract?

Answer 33

Factual causation
Courts have treated determination of factual causation in broad way - advocating common sense approach
Gallo: suggested that D’s breach should be ‘dominant’ or ‘effective’ cause of loss if loss is to be recoverable

Legal causation
Even if factual causation established, claim will fail if legal causation not established, eg in there is novus actus interveniens ie particular category of intervening event which will be treated as having broken chain of causation
If intervening event was ‘likely to happen’ it will generally not be held to break chain of causation

Question 34

What are the two limbs of remoteness?

Answer 34

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may:
1. Fairly and reasonable be considered either arising naturally ie according to usual course of things, from such breach of contract itself,(Not based on actual knowledge of particular parties) or
2. Such as may reasonably be supposed to have been in contemplation of both parties, at time they made contract as probable result of breach of it ie that particular D had sufficient knowledge of particular and special circumstances to be aware of risk of those losses

Question 35

What is the definition of restitution interest?

Answer 35

Represents interest C has in restoration to them of benefits which defaulting party has acquired at their expense

C must also show that he has legitimate interest in depriving D of profit

Although Lordships in Blake declined to give more clear guidance they indicated that existence of ‘efficient breach’ would not alone justify allowing account of profits

Efficient breach is one where:
(a) Breach was cynical and deliberate
(b) Breach enabled D to enter into more profitable contract elsewhere and
(c) By entering into new and more profitable contract, D put it out of his power to perform contract with C

Efficient breach puts breaching party in better position than if there had been no breach - efficient for breaching party to breach contract

Efficient breach alone will not justify award of damages on restitutionary measure

Question 36

What are the remedies available under CRA for contracts of goods?

Answer 36

Short term right to reject
Available to consumer for 30 days running from time:
(a) That ownership has passed (or in case of contracts for hire or the like, possession has been transferred) and
(b) Goods have been delivered and
(c) In cases where trader required to install goods or take other action to enable consumer to use goods, trader has notified consumer that required steps have been taken

Right to repair/replacement
Available unless repair or replacement is either impossible or disproportionate, in sense that it imposes unreasonable cost on trader relative to other remedies and interests of consumer

Right to price reduction or final right to reject
Consumer not entitled to both
In either case, remedy may only be exercised where:
(a) After one repair or one replacement, goods do not conform to contract or
(b) Consumer can require neither repair or replacement of goods bc it is impossible or disproportionate or
(c) Consumer has required trader to repair or replace goods, but trader is in breach of requirement to do so within reasonable time and without significant inconvenience to customer
s. 24(10): general rule is that where final right to reject is exercised within 6 months (clock running as short term right) there should be full refund with no deduction for purpose - this does NOT apply to motor vehicles or any other goods that may be specified by statutory order

Question 37

What are the remedies available under CRA for contracts for digital media?

Answer 37

Right to repair/replacement
s. 43(2)(a): requires trader to repair or replace digital content within reasonable time and without significant inconvenience to consumer
s. 43(3): precludes consumer from requiring repair or replacement where impossible or disproportionate

Right to price reduction
s. 44: qualifies right to price reduction, right being exercisable only where consumer either
(a) Cannot require repair or replacement bc impossible or disproportionate or
(b) Where trader has failed to repair or replace digital content within reasonable time and without significant inconvenience to consumer

Right to refund
- Where trader had no right to supply digital content it supplied, s. 45 gives consumer right to refund of all money paid for digital content
- Refund must be given within 14 days - trader must give refund using same payment method consumer used to pay for digital content without imposing fee in respect of refund

Question 38

What happens if digital contract of trader damages other digital content or device of consumer?

Answer 38

(a) Trader supplies digital content to consumer under contract
(b) Digital content causes damage to device or to other digital content
(c) Device/digital content that is damaged belongs to consumer and
(d) Damage is of kind that would not have occurred if trader had exercised reasonable care and skill
Then consumer is entitled to repair or compensatory payment

Question 39

What are the remedies available under CRA for contracts for services?

Answer 39

Right to require repeat performance
s. 55(2)(a): requires supplier to provide repeat performance within reasonable time and without significant inconvenience to consumer (s 55(4) offering usual guidance on what, for this purpose, is reasonable and significant)
s. 55(3): consumer cannot require repeat performance if completion in conformity with contract is possible

Right to price reduction
s. 56(3): price reduction only becomes available where
(a) Repeat performance is impossible or
(b) Trader has failed to provide repeat performance within reasonable time and without significant inconvenience to consumer

Question 40

What is a liquidated damages clause?

Answer 40

= clause which stipulates certain sum which is to be payable on particular breach of contract

Can be commercially advantageous for party bc it fixes amount that will be due for breach as debt arising under contract without C having to deal with uncertainty of establishing case in for damages in accordance with principles that apply to damages generally

It also makes clear to party what is at stake if it fails to comply with its obligations ie risks involved in contract - party can then take risk into account when determining price for contact

Question 41

Can court intervene in relation to liquidated damages clauses?

Answer 41

There are instances where court will intervene - various statutory and judicial limitations on clauses which limit/exclude liability in event of breach

Courts have also overtime developed jurisdiction to intervene in contract to strike down LD clause which requires party in breach to pay excessive sum, such that it becomes a penalty

Penalty clause = liquidated damages clause which requires party in breach to pay excessive sum, such that it becomes penalty, and so clause will not be upheld

If clause regarded as penalty clause, then it will be struck out by Court and C will only be entitled to ‘unliquidated’ damages (ie damages assessed in normal way) as compensation for breach

Question 42

What is the test to determine whether cause is a penalty clause or a liquidated damages clause?

Answer 42

Is clause primary or secondary obligation?
Clause will be primary if it is part of primary obligations in commercial context of contract ie furthers commercial objective
Clause will be secondary if it is obligation triggered by breach of contract to compensate innocent party
*** If PRIMARY, clause will NOT engage penalty rule at all, and so will be valid

If secondary, clause will be penalty if it imposes detriment out of all proportion to any legitimate interest of innocent party in performance of primary obligation - SC gave two steps:
1. What (if any) legitimate business interest is served and protected by clause?
2. Is detriment imposed to protect that interest extravagant, exorbitant or unconscionable?
*** Burden of proof is on person alleging clause is penalty to prove this

Question 43

What is specific performance and what principles does it have?

Answer 43

= order or decree of specific performance is issued by court to D, requiring it only to carry out its obligations under positive term of contract

Breaching court order has more severe consequences than breaching contract - can be treated as contempt of court and lead to imprisonment - make it unlikely that party will refuse to comply with order for specific performance

General principles of equity that C ‘he who comes to equity must come with clean hands’ + must be brought with reasonable promptness

And specific principles
S1. pecific performance will not be awarded where it would cause undue hardship on D
2. Promise given for no consideration is not specifically enforceable, even if made as deed
3. Specific performance will not be awarded in breach of contracts for employment - for other contracts involving services, specific performance will not be awarded if there has been breakdown of trust and confidence between parties, or if court would need to consider subjective opinions regarding performance
4. Specific performance will not be awarded for breach of obligation to perform series of acts which would need constant supervision of court
5. Specific performance will not be awarded for breach of contract which is not binding on both parties - so where contract is voidable at option of party A, party B will not get specific performance against party A (particular importance in connection with minors’ voidable contracts)

Question 44

What are prohibitory injunctions and what principles relate to it?

Answer 44

= court order restraining party from breaching negative term

General principles of equity that C ‘he who comes to equity must come with clean hands’ + must be brought with reasonable promptness

Granted only where ‘just and convenient’

Question 45

When will a specific performance order or prohibitory injunction be granted?

Answer 45

Most important point: order for specific performance/prohibitory injunction will not be granted if damages are appropriate and adequate remedy

To show that they are inadequate in specific performance context: will need to be proved that subject matter of contract is unique/irreplaceable, or that award of damages would be ineffective to provide acquire compensation

Both specific performance and prohibitory injunction are discretionary and equitable remedies - court can consider all relevant circumstances and there are no clear criteria which, if satisfied, entitle party to injunction

Question 46

Will court look at the substance or form to decide what remedy?

Answer 46

Court will look at substance of proposed remedy when deciding whether it would amount to prohibitory injunction or specific performance, not superficial wording of injunction

Question 47

What the difference between a positive and negative term?

Answer 47

Positive term = term which requires party to do smth
Negative term = term which requires party not to do smth

Question 48

What is a guarantee?

Answer 48

= promise by party to ensure that another party carries out its obligations, or promise to fulfil those obligations itself if that other party does not do so

Question 49

Can a guarantee and indemnity be given at the same time?

Answer 49

Yes

Question 50

What is an indemnity?

Answer 50

= promise to reimburse someone in event that they suffer stated loss

Question 51

Can an indemnity exist in two-party scenario?

Answer 51

yes

Eg A agrees to deliver goods to B. A agrees to indemnify B in relation to any loss suffered by B as a result of late delivery. This is still a promise to reimburse someone for loss, but the obligation to deliver and the indemnity are coming from the same party. B would be entitled to damages from A anyway, but an indemnity can be drafted in a way that avoids some of the rules of causation, mitigation, remoteness and proof that might limit a claim for damages - much will depend on the drafting (which should be more detailed than our example!)