Remedies Flashcards
Rule for calculating damages:
Look at the claimants position as it is and compare to the position they would have been in if properly performed [expectation loss]
When will expectation loss be used?
Where you can claim for lost profits
When will reliance loss be used?
A claim for expenses incurred in reliance of the contract being performed
Use when expected profits are too uncertain.
Example of reliance loss
Dan Humphrey engaged an actor (Olivia) to play the lead role in a TV production. Olivia later refused to perform, forcing Dan to abandon the production. Dan claimed reliance loss for wasted expenditure, including director’s fees, designer’s fees, and stage manager’s fees.
Pecuniary Losses
Losses remedied by damages
Non - pecuniary losses
Pain and suffering, inconvenience, can be compensated.
Happens only if one of the objects of the contract was to provide pleasure or peace of mind.
What is remoteness of loss?
If a loss is so remote/unpredictable and improbable then its unfair to make the defendant responsible for them.
Mitigation of Loss
Steps taken to reduce the amount of loss. Claimants cannot claim for any damage due to their lack of mitigating
Dismissed from job - look for another
If work is defective, what is the normal measure of loss?
The cost of putting it right - cost of cure
What is a specified damages clause?
A specified damages clause is a genuine pre-estimate of the loss likely to be caused by a breach. It provides certainty and avoids the need for litigation.
What are the advantages of a specified damages clause?
Provides certainty about the amount payable in case of breach.
Avoids the cost and time of proving actual loss in court.
The innocent party only needs to prove the breach, not the extent of the loss.
What is a penalty clause?
A penalty clause is a clause that imposes a disproportionately high sum on the breaching party to punish them rather than compensate the innocent party
Are penalty clauses enforceable?
No, penalty clauses are unenforceable if the sum is extravagant or disproportionate.
What happens if a clause is deemed a penalty?
Thecourt will ignore the clause and assess damages based on the usual principles of measure of damages, remoteness, and mitigation.
