remedies Flashcards
what is the aim of awarding damages?
put C in position as if the breach never happened (not punitive)
can a C claim damages even if they didn’t suffer any loss from breach?
yes, but purely nominal = nominal is small token amount which award that there has been a breach of contract in a case where there is no other remedy available
what is the ‘expectation interest’ when calculating damages?
putting the C in a position they expected to be in as if the contract had been performed properly
what are the 3 mechanisms for calculating expectation interest for damages?
- cost of cure
- diminution in value
- loss of amenity
What is the test for factual causation in contract law?
The test is whether the defendant’s actions were a dominant or effective cause of the loss
Which of the following is the most accurate summary of the description of damages which are not too remote, as per Hadley v Baxendale? (2 part test)
1) The damages which arise naturally according to the usual course of things from the breach
2) or those which the parties contemplated at the time they made the contract would probably be caused by a breach of contract.
What happens if a claimant fails to mitigate their losses following a breach of contract by the other party?
The claimant will not be able to recover the losses attributable to the failure to mitigate
what is the rules on mitigation for a party getting damages for breach of a contract?
the injured party should take ‘reasonable steps’ to minimise the effect of the breach
What is a liquidated damages clause?
A clause which stipulates a certain sum of money which is payable in the event of a particular breach of contract
What happens if a court finds that a liquidated damages clause is a penalty?
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
what is the makdessi approach to determine whether a clause is a penalty clause? (2 part test)
- is the clause primary or secondary obligation? (if primary then doesnt engage penalty rule)
- if secondary, the clause will be a penalty if it imposes a detriment out of all proportion to any legitimate interest of the innocent party in the performance of the primary obligation.
where does the burden of proof rest when deciding if a clause is penalty?
the burden of proof is on the person alleging the clause is a penalty to prove this
What is a secondary obligation in the context of the judgment in Cavendish Square Holding BV v Makdessi and ParkingEye Ltd v Beavis?
It is an obligation triggered by breach of contract to compensate the innocent party
what is a positive term?
it is a term that requires a party to do something
what is a negative term?
it is a term that requires a party to not do something
