Remedies

Question 1

What are the three possible measures of expectation interest? 2 caveats?

Answer 1

1. Diminution of value - market value difference between the performance received and the performance promised
2. Cost of cure - the costs of remedial works to convert defective performance into complete performance (normally awarded in building contracts unless (i) out of all proportion to the benefit to be awarded and (ii) no intention to remedy the defect)
3. Loss of amenity - loss of something of non-monetary value (only in non-commercial situations)

ONLY need to resort to the above IF it is not obvious what compensation is necessary to cover the expectation interest. But expectation interest cannot be awarded if too speculative.

Question 2

Three limits on reliance interest claims?

Answer 2

1. Only losses and expenses incurred before the breach can be recovered.
2. C must show he would at least have broken even if the contract had been properly performed - otherwise only nominal damages will lie
3. Expectation or reliance interest are mutually exclusive claims.

Question 3

3 requirements before a claim for restitution interest will lie?

Answer 3

A-G v Blake

1. In exceptional cases
2. Where C has a legitimate interest in depriving D of his profits and
3. Other remedies would be inadequate (e.g. Esso v Niad - could not quantify expectation or reliance)

Question 4

When can damages including mental distress be recovered?

Answer 4

Usually not recoverable if the distress does not amount to a recognisable psychiatric or physical injury which would support a personal injury claim.

But can be recovered (i) if the purpose of the contract was the provision of pleasure, relaxation and peace of mind (see loss of amenity cases); and (ii) the contract was B2C rather than purely commercial

Question 5

When will contributory negligence (i) be relevant and (ii) not apply?

Answer 5

Where C’s act (i) does not constitute a novus actus (e.g. insufficiently unforeseeable) but (ii) constitutes a breach of an independent TORTIOUS (not contractual) duty to use reasonable care and skill.

It does NOT apply where (i) the only duty C has breached is a contractual one or (ii) the term breached by D imposes strict liability.