Remedies Flashcards
What are the two main classifications of remedies?
- Common law remedies (available as of right)
- Equitable remedies (awarded at the discretion of the courts)
What is the most common remedy sought in common law?
The most common remedy sought for is damages.
What is the aim of damages in contract law?
Damages aim to put the injured party (claimant) in the same position as if the contract had been performed.
What is expectation interest?
Expectation interest is the protection of the claimant’s expectation on performance interest.
What is the general rule regarding contractual damages?
The general rule is that contractual damages compensate for pecuniary loss, not for non-pecuniary loss such as mental distress.
Which case established the general rule for damages?
Established in the case of Addis v Gramophone Co Ltd.
What are the exceptions to the rule of damages?
- Contracts where the whole purpose is pleasure, relaxation, and peace of mind (e.g., holiday - Jarvis v Swans Tours Ltd)
- Contracts where a major object is pleasure, relaxation, and peace of mind (e.g., Farley v Skinner).
What are the two key questions when awarding damages?
- Is the damage too remote?
- How can the damage be quantified?
What must be established regarding remoteness of damage?
To be awarded damages, the loss must not be too remote from the breach.
What are the two rules from Hadley v Baxendale regarding loss?
- Loss which would arise naturally from the breach (objective test).
- Loss that may reasonably be supposed to have been in the contemplation of the parties at the time of the contract (subjective test).
What was the outcome of Victoria Laundry v Newman Industries (1949)?
Held: YES for normal profits (objective test) and NO for lucrative contract (subjective test).
What is the remoteness and assumption of responsibility test?
In deciding whether a loss is recoverable, it is important to ask if the defendant reasonably contemplated the loss and whether they assumed responsibility for the type of loss that occurred.
What is the significance of Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) 2008?
The Court held that $1,340,000 was too remote because Party A could have never ‘assumed the responsibility’ for this amount.
What are the two methods of quantifying damages?
- Expectation loss - puts the claimant in the position they would have been in if the contract had been performed.
- Reliance loss - puts the claimant in the position they were in before the contract was made.
What is the market price rule for measuring expectation loss?
Contract price – market price = damages for loss.
What is the cost of cure method?
The cost of rectifying the effects may be disproportionate to the difference in value between what was received and what was ordered.
What is the loss of chance method?
Used to quantify damages when there has been a loss of opportunity that is quantifiable and there was a substantial chance it would have come to fruition.
What are the two limitations on the award of damages?
- Causation - the breach must be an effective cause of the claimant’s loss.
- Mitigation - the claimant must take steps to reduce their losses.
What is specific performance in equitable remedies?
Specific performance is an order to force a party to carry out their contractual obligations when damages alone would be inadequate.
What is an injunction?
An injunction orders the defendant NOT to do a particular thing (prohibitory injunction).
What is restitution?
Restitution is the remedy for ‘unjust enrichment’, meaning one party has received a benefit at the expense of the other.
What is quantum meruit?
Quantum meruit is a claim for reasonable remuneration for services rendered.
What is an action for an agreed sum?
An action for an agreed sum is a claim to enforce the debt under contract, not the same as damages.
What is the main difference between claiming for an agreed sum and claiming for damages?
An action for an agreed sum has many advantages over an action for damages, including that the amount claimed is known from the beginning and does not involve issues like remoteness or mitigation.
