Remedies

Question 1

Cavendish Square v El Makdessi

Answer 1

1) Is the clause a primary or secondary obligation
Primary = furthers commercial objectives of contract
Secondary = triggered by breach of contract
2) Will not be a penalty clause if it clearly protects a legitimate business interest (in the commercial context) and only imposes a detriment that is proportionate to that legitimate interest (not extravagant, exorbitant, or unconscionable in comparison to interest being protected)

Question 2

ParkingEye v Beavis

Answer 2

£85 parking fine was a secondary obligation, but was protecting a business interest (generating money for pension fund) and was proportionate to that interest

Question 3

Robinson v Harman

Answer 3

Where a party sustains a loss by reason of breach of contract, he is, as far as possible, to be placed in the same situation as if the contract had been properly performed

Question 4

The Golden Victory

Answer 4

Expectation loss is the usual measure of damages awarded

Question 5

Birse Construction v Eastern Telegraph

Answer 5

BC built college for ET, who then decided there were £1.5m worth of defects
No evidence they were going to use damages awarded to repair the fault (selling building) so awarded nominal damages

Question 6

McGlinn v Waltham Contractors

Answer 6

M contracted with WC to build a house and disliked it, so demolished and reconstructed the house
Cost of demolition and reconstruction was so unreasonable he was awarded nominal damages

Question 7

Ruxley Electronics v Forsyth

Answer 7

F contracted with RE for a swimming pool that ended up being a few inches shallower than specified
No damage to value of property
Cost of cure was disproportionate to original contract price
Lack of intention to carry out remedial works
Settled under loss of amenity - should have a remedy where their loss is personal, not economic in value

Question 8

Farley v Skinner

Answer 8

F bought a weekend house near Gatwick Airport, and asked S to carry out survey, specifically asks about aircraft noise - fails to notice house is directly under Mayfield Stack
Different in value was impossible to quantify, no possible cost of cure, so settled under loss of amenity
Courts will consider mental distress in contracts with the major object of relaxation, pleasure etc.

Question 9

Regus v Epcot

Answer 9

Loss of amenity not available in commercial contracts

Question 10

McRae v Commonwealth

Answer 10

Reliance loss used where the expectation loss is too speculative to calculate

Question 11

Anglia TV v Reed

Answer 11

Pre-contractual expenses are available under damages

Unfettered choice between expectation and reliance loss for claimant

Question 12

C&P Haulage v Middleton

Answer 12

Will not be allowed to escape a bad bargain

Question 13

The Mamola Challenger

Answer 13

Claimant must show that their pre-contractual expenses would have been recovered had the contract been performed

Question 14

AG v Blake

Answer 14

Restitution interest available in:
1) Exceptional circumstances
2) Traditional remedies are inadequate
3) Claimant has a legitimate interest in preventing the defendant’s profit-making activity and therefore depriving him of profit
An efficient breach would not be sufficient

Question 15

Esso v Niad

Answer 15

Liberal approach to restitution - successful claim in commercial breach

Question 16

The Sine Nomine

Answer 16

Restitution not allowed if damages are adequate

Question 17

Experience Hendrix v PPX Enterprises

Answer 17

Preventing unlicensed recordings of Jimi Hendrix was not an exceptional case and not concerned with anything as special or sensitive as national security

Question 18

Addis v Gramophone Company

Answer 18

General rule - no damages for mental distress, anguish or annoyance in contract law

Question 19

Jarvis v Swan Tours

Answer 19

Mental distress allowed when whole purpose of contract is enjoyment/relaxation/pleasure/peace of mind

Question 20

Hayes v Dodd

Answer 20

Mental distress/anguish/annoyance not recoverable in commercial contracts

Question 21

Malik v BCCI

Answer 21

Loss of reputation is recoverable if the claimant has a reputation to be lost

Question 22

Chaplin v Hicks

Answer 22

Loss of chance recoverable if quantifiable in monetary terms and there was a real and substantial chance that the opportunity might have come to fruition

Question 23

Galoo v Bright Grahame Murray

Answer 23

Breach must have been the dominant and effective cause of the loss
Common sense approach

Question 24

Lambert v Lewis

Answer 24

NAI can break chain of causation if unforeseeable and unreasonable (farmer continued using defective trailer - amounts to NAI breaking chain of causation between manufacturer and claimant)

Question 25

Monarch Steamship v Kalshmans

Answer 25

Outbreak of WWI did not break chain of causation - ship’s defect was dominant and effective cause

Question 26

Hadley v Baxendale

Answer 26

1) Did the loss arise naturally from the breach - would a reasonable person have expected that loss?
2) Was the loss reasonably in the contemplation of both parties at the time of contracting (actual knowledge)?

Question 27

Jacksons v Royal Bank of Scotland

Answer 27

Special losses have to be communicated prior to contracting rather than prior to breach

Question 28

Victoria Laundry v Newman Industries

Answer 28

Loss of general profits was recoverable (arose naturally), loss of highly lucrative special contract was not (not communicated to defendant’s at time of contracting)

Question 29

The Heron II

Answer 29

Arising naturally from the breach = ‘loss not unlikely to occur’

Question 30

The Achilleas

Answer 30

Traditional approach = Hadley v Baxendale, as amended by Heron II
May not apply where accepted in the commercial context, those losses would not be awarded (e.g. loss of subsequent charter party)

Question 31

British Westinghouse v Underground Electric

Answer 31

Reasonable steps required = what a reasonable businessman would do to minimise the loss attributable to the breach of contract

Question 32

Pilkington v Wood

Answer 32

Mitigating party not expected to embark upon litigation

Question 33

Payzou v Saunders

Answer 33

May have to accept breach if cost-effective

Question 34

Banco de Portugal v Waterlow

Answer 34

Mitigation is not weighed in nice scales - as long as steps are reasonable, the courts will not look to what further steps he could have taken

Question 35

Vesta v Butcher

Answer 35

Contributory negligence generally not available for breach of contractual duty (strict liability) unless for negligence arising independently of contract