Remedies Flashcards
What is a remedy?
An order of the courts sought by the claimant
Where litigant seeks a remedy, they will almost always be asking the court to disturb an existing status quo
Usually by ordering one party to pay the other money
What are the 3 main remedies for breach of contract?
1) Action for agreed sum (or action for the price)
2) Specific performance
3) Damages - monetary compensation for loss caused by breach
What is ‘Action for agreed sum’?
The action brought where the breach is not paying an agreed sum of money
Not the same as an action for damages
Not subject to the damages rule about mitigation
What is ‘Specific performance’?
Order of the court that the terms of the contract be performed
Doesn’t normally apply to money obligations
It’s an equitable remedy, and rarely available beyond contracts concerning land
What are ‘Damages’?
The idea of compensation - based on claimant’s loss
General principle: damages for breach of contract should put the claimant in the position they would have been in if the contract had been performed
Give two examples of Limiting Doctrines
Mitigation
Remoteness
What is Mitigation?
Where a claimant suffers a loss which is ongoing, they cannot just let the losses pile up - they’re under a duty to take reasonable steps to minimise losses
Give a case example of Mitigation
The stopped factory - e.g. Payzu v Saunders [1919] - the innocent buyer had to reconstruct with seller in breach for some goods
Describe the relevant case law concerning ‘Remoteness’
Hadley v Baxendale [1854]
Late return of miallshaft by carrier - mill left idle for longer as C didn’t have spare shaft
What is the Hadley Principle?
Two ‘limbs’
- D liable for all ordinary losses i.e. those anyone entering contract could foresee without special knowledge
- D only liable for non-ordinary losses if they had knowledge of the circumstances when entering the contract
Victoria Laundry v Newman is the relevant case law for applying both limbs of the Hadley Principle, briefly describe the case
- Contract under which D sold C laundry boiler; delivered 5 months late
- C suffered lost profit: including v lucrative laundry contract with government
- Type of loss had to be foreseeable, didn’t matter if EXTENT was unforeseeably large
The Achilleas case is another example of application of the Hadley Principle. Briefly describe the case
Shipowner hired Achilleas to D’s charter, C’s contracted for second charter to X for £40k, starting day after boat was due back. D returned ship 9 days late, X entitled to cancel charter.
Market rate had fallen - Cs accepted lower rate from X of £31k, C claimed difference for whole of second charter period - over £1m
High Court and CA held that loss on whole charter foreseeable, thus C’s won
What was the impact of the Achilleas case?
- Losses have to be foreseeable (either in the ordinary course, or because D had special knowledge - i.e. the Hadley test, but:
- Applying Lord Hoffman, even foreseeable losses won’t attract liability if understanding in trade is that D is not responsible for such losses
Give 4 other measures of loss?
- Expectation, reliance, restitution
- Purchase price
- Expenditure
- Lost Profit
When can C claim lost expenditure? Explain the case that demonstrates this.
Lost profit/expenditure - Anglia TV v Reed
Contract to hire actor, Actor double booked, repudiated contract week before filming, Anglia abandoned film,
- No means of knowing what profit, if any, could have been made
- Claim for lost expenditure £3k, £1.9k of which was BEFORE contract made - Pre-contract spend is not really reliance loss
What happens to C’s claim of lost expenditure when there is a loss (bad bargain)?
If C cannot prove loss of profit, they can claim lost expenditure, unless:
- D can show expenditure would not have been covered (CPP Haulage v Middleton [1983] )
- Burden of proof key here.
What case illustrates the issue of ‘drop in value or cost of cure?
Ruxley Electronics
- Contract to build swimming pool for £18k
- Pool build shallower than specified, cost of getting right was £22k
- CC judge awarded £2.5k for loss of amenity
- CA court allowed claim for £22k cost of replacing pool
- HL couldn’t claim cost of replacing pool because cost was out of all proportion to benefit which would be obtained
Explain the case of Radford v DeFroberville
C sold adjoining land to D, D agreed to build boundary wall but never did: C could claim cost of building wall - test was whether it was reasonable as well as intent
What are the damages for loss of amenity?
- An example of damages for non pecuniary loss
- Loss is non pecuniary where it cannot be avoided/recouped by spending money e.g. ruined holiday
What is Non-Pecuniary loss?
Loss in non-pecuniary where it cannot be avoided/recouped by spending money - e.g. a ruined holiday
Meaning there’s no obvious way to translate the loss into money terms
Why is non-pecuniary loss a problem?
- The problem of quantification - how much for ruined holiday?
- The problem of definition - what loss should count for purposes of claim? - Disappointment, distress, inconvenience?
What was the court’s original stance on non-pecuniary loss?
Addis v Gramaphone Co (1909)
- P dismissed without proper notice from job
- HL held could not claim damages for “injured feelings”
- Since treated as general rule for all kinds of contract
What progression was made in the courts view on non-pecuniary loss in the 70s and onwards?
Jarvis v Swan Tours (1973)
- P bought ski holiday, hotel brochure promised, lies in brochure
- Denning: damages for mental distress can be recovered in contract, just as damages for shock can be recovered in tort.
= C could claim damages equivalent to double the price of the holiday
What limits were imposed on non-pecuniary loss by the case of Bliss v South East Thames Regional Health Authority?
P wrongfully suspended from job, CA said: could not claim damages for mental distress “unless contract was one to provide peace of mind or freedom from distress”
