Remedies Flashcards
What is the default approach to calculation of damages?
Putting the innocent party in the same position post-breach that they should have been in had the contract been performed - ‘expectation interest’
What are the three mechanisms for calculating expectation interest?
- Cost of cure
- Diminution in value
- loss of amenity
When is cost of cure used?
Defective works: the cost of substitute or remedial work required to put claimant in position they would have been in
- the claimant must act reasonably regarding the defective works
What is diminution in value?
The difference in value between performance received and that promsed in the contract
What is loss of amenity?
Reflects the non-economic loss of pleasure - unusual in commercial setting
What is reliance interest?
Allows the claimant to recover expenses incurred in preparing for, or in part performance of, the contract which have been rendered pointless by the breach
What position does the reliance interest put the claimant in?
Puts the claimant in position the would have been had they never contracted
Only allows recovery of wasted expenditure incurred prior to breach
Expenses must have been recoupable if it had been properly performed - defendant must prove they would not have been
Are damages available for mental distress?
General rule - damages not available for mental distress, anguish or annoyance
Exception - allowed if major object of contract was to provide pleasure
Are damages available for loss of reputation?
General rule - not available
Are damages available for loss of chance?
Recoverable if lost chance is quantifiable in monetary terms and there was a real and substantial chance the opportunity might have come to fruition
- Where the chance of winning or obtaining the benefit is 50% or greater, the claimant should seek to recover their expectation loss in full and they will succeed if this can be proved on the balance of probabilities
Why are reliance losses relevant?
As the courts will not award expectation damages if they are highly speculative
Instead, the claimant is limited to its reliance loss (a more cautious, back-ward looking approach)
Can damages be recovered on behalf of another?
General rule - damages cannot
Exception - privity of contract
What is restitution interest?
Interest a claimant has in restoration of benefits which the defaulting party has acquired at their expense
Rare - only awarded where other remedies are inadequate and C has legitimate and exceptional interest in depriving D of profit
What is the requirement for factual causation?
Is breach dominant or effective cause of loss?
Damages can only be recovered if there is a causal link (factual and legal causation) between breach of contract and loss
What is the test for legal causation?
An act which would not be deemed likely to happen = breaks the chain of causation
What is the two limb test for remoteness?
- Does the loss arise naturally, according to the usual course of things, from the breach?
- Yes (normal type which would follow from breach) = loss recoverable
- No = consider limb 2 - Was it reasonably in contemplation of both parties at the time of contracting, as the probable result of breach? Burden of proof on claimant to establish this
Was does it mean for the probable result of the breach to be in ‘contemplation’?
- Particular defendant has actual knowledge and special circumstances to b aware of the risk
MCQ - ‘x did not tell y of these contracts’ - there is not evidence of actual knowledge
If there is no actual knowledge = losses are too remote and not recoverable
At what point is contemplation judged from?
At the time of contracting, not at the time of breach
How does restitution interact with unjust enrichment?
- Provides a remedy where there is a total failure of consideration
- Court may use principles of restitution to prevent party benefitting from lack of consideration
- Restitution will reverse the unjust enrichment of one of the parties
CRA 2015 - Remedies where goods are not of satisfactory quality / reasonably fit for purpose / corresponding with description
- short term right to reject available for 30 days
- right to repair / replace unless impossible or disproportionate
- right to price reduction / final right to reject if
a) impossible/disproportionate to repair/replace
b) tried once and goods still did not conform
c) trader failed to replace/repair within reasonable time
CRA 2015 - Remedies where digital media does not conform to contract at any time within 6 months beginning with day of supply
- right to repair/replace within reasonable time without inconvenience
- right to price reduction
- right to refund within 14 days if trader has no right to supply the content
- right to repair or compensation if digital content damages device
CRA 2015 - Remedies where services are non-conforming
- Right to repeat performance within a reasonable time/without inconvenience
- right to price reduction only where repeat performance is impossible or trader has failed to do so within reasonable time
What is a liquidated damages clause?
Clause stipulating a sum which is to be payable on a particular breach of contract, no more or no less
What is a penalty clause?
A liquidated damages clause which requires the party in breach to pay an excessive sum, such that it will be struck out by Court and claimant will only be entitled to unliquidated damages (assessed in normal way)
