Remedies Flashcards
Poussard v Spiers
A term is a condition if it goes to the root of the matter. This allows the claimant to withhold the contract price
Bettini v Gye
A term is a warranty if it does not change the contract in substance
Hong Kong Fir v Kawasaki
An innominate term is where the breach of a term is judged to be a condition or warranty dependent on the outcome. If the contract deprives the claimant of the full benefit of the contract then it is a condition.
Schuler v Wickman
The importance placed upon the term will affect whether it is a condition or warranty
I.C.U.R
Incorporation - Term incorporated into contract and aware of term
Construction - Liquidated or penalty
UCTA 1977 - Exclusion clause
UTCCR 1999 - Consumer contracts only (Business to consumer)
Dunlop v New Garage; Test for valid liquidated damages - Lord Dunedin
- Not dependent on how parties label terms
- Designed to scare the contractor into compliance (in terrorem)
- Dependent on the knowledge at the time of contracting
- If sum is extravagantly greater than possible loss then it is a penalty
- Greater sum payable for late payment
- Sum at a certain level regardless of nature of the breach
McAlpine v Tilebox
Pre-estimate of loss does not have to exactly co-incide with actual loss, as long as it was a genuine pre-estimate
Parker v SE
For term to be incorporated the parties must be aware of the term.
L’Estrange v Graucob
Incorporation by signature
Robinson v Harman
Expectation interest - Puts the parties in the position they would have been in had the contract been properly performed
Ruxley v Forsyth
Establishes the 3 levels of restitution; Difference in value Cost of cure Loss of amenity * these need only be considered if there would be a difference between them
Anglia TV v Reed
Reliance interest - This puts the parties in the position as if they had not contracted.
Anglia TV v Reed states that there is an unfettered choice between a reliance and expectation interest
Can claim for pre-contractual losses
Regus v Epcot
Loss of amenity rarely awarded in commercial contracts
McGlinn v Waltham Contractors
Cannot create the loss you are claiming for
McRae v Common Wealth Disposals
Court will not award expectation damages which are too speculative
C + P Haulage v Middleton
Reliance claim not possible if losses would possibly not be recovered anyway.
AG v Blake
Restitution interest - This is where profits can be claimed even where there is no loss
Criteria;
Exceptional circumstances
Legitimate interest in the deprivation of profit
Other remedies inadequate
Sine Nomine
Where it is an efficient breach; compensatory damages would suffice and there is no legitimate interest in the profits, then there is no claim for restitution
Esso v Niad
High watermark case, restitution allowed even though damages not exceptional
WWF v WWF
Affirms that restitution only possible with exceptional damages
Addis v Gramophone
General rule that there is no remedy for mental distress
Jarvis v Swans
Mental distress can be claimed if the contract is purely for enjoyment
Malik v BCCI
Can claim for loss of reputation
Chaplin v Hicks
A claim can be made for loss of chance
Galoo v Bright Graham Murray
- Causation found if the breach is the dominant and effective cause of loss
- Court takes a common sense approach to causation
Lambert v Lewis
Breach not dominant and effective cause where claimant had knowledge of breach and continued into contract
Hadley v Baxendale
Test for remoteness in relation to a contractual remedy;
- If the loss arises ‘in the usual course of things’, then there is judged to be imputed knowledge of the loss and it is claimable
- If an abnormal loss is ‘in contemplation of both parties’, then the loss is claimable as the parties are judged to have specific knowledge of the abnormal loss
Jackson v Royal Bank
Remoteness test is based on knowledge at the time of contracting
Victoria Laundry v Newman
Court of appeal interpretation of the remoteness test. Defendant had knowledge of the loss from breach, and the loss was not abnormal so imputed knowledge would suffice anyway. No knowledge of abnormal loss, so not claimable
The Heron II
HoL interpretation of remoteness test. Claim for lost profit from late delivery was allowed as though there was not actual knowledge it was judged that the loss was not ‘unlikely to occur’ so this constituted imputed knowledge for the purpose of the Hadley v Baxendale test (1st limb)
Balfour Beatty v Scottish Power
- Loss was not ‘in usual course of things’ therefore required that the loss be ‘in contemplation of both parties’, which it was not as scottish power had no knowledge of particular specific loss which was possible
- For the loss to be ‘in contemplation’ it must have had a ‘‘very substantial degree of probability of occurring’.
The Achilleas
Unexpected drop in charter rates meant that loss incurred. Not ‘in normal course of events’ so imputed knowledge not sufficient. No actual knowledge, which was necessary as loss judged to be unexpected so abnormal loss.
Mitigation
No obligation to mitigate but cannot claim the losses which you do not try and mitigate
British Westinghouse v Underground
Only required to take reasonable steps to mitigate
If loss completely mitigate then there is no claim
Pilkington v Wood
Not expected to litigate to mitigate. (e.g. liquidated damages clause which you are claiming as loss, no need to challenge this, as no obligation to litigate)
Payzu v Saunders
If more expensive to contract elsewhere then obligated to accept breach
Banco de Portugal v Waterlow
Do not have to mitigate perfectly
Vesta v Butcher
Contributory negligence only available where the breach of contract is also a tort (negligent)
What is the mnemonic for the structure of a remedies question?
I (Introduction) Party (Parties and contract) Tonight (Terms) But (Breach - Condition/warranty) Later (Liquidated damages?) Can't (Compensation) Ovulate (Other claims) Lost (Limiting factors) Consciousness (Conclusion)
Hayes v Dodds
No mental distress damages in a commercial contract
Farley v Skinner
- Widens mental distress damages to include a ‘major object of the contract’ as enjoyment
What measure of loss to apply?
- Unfettered choice
- Is there any reliance?
- Is the Expectatino greater than the reliance?
- Is the expectation too speculative (McRae v Commonwealth Disposals)
Nominal damages
Awarded where LOA would be awarded but cannot be as it is a commercial contract (Regus v Epcot)
Girozentrale v Country
The cause can still be the dominant and effective cause, even if it is not the only cause of even the most potent. Wide interpretation.
Sumpter v Hedges
Quantum Meruit awarded
Birse v Eastern Telegraph
- The cost of cure is the prima facie measure of compensation in construction works. However will not be awarded if disparity between that and diminution in value.
McGlinn v Waltham
If money were to be awarded and it would not be used to remedy defect then it will not be awarded as LOA will be awarded instead
Interfoto v Stiletto
Courts will strike out a penalty clause and impose a reasonable sum
