Remedies and damages Flashcards
Remedies
they are divided into 3
- legal remedies (common law remedies)
- equitable remedies
- remedies under a specific statue
damages
legal remedy
the concept of damages, is to put the claimant (the injured party) into the position they would have been in if the contract had not been breached
this is smilar to the award of damages in tort law
damages are a legal remedy as they are available if the contract jas been breached and the clamaiant is as of right - they are entilited to it
- damages are subjective as courts will look at the facts of the case and award damages in ana ttempt to place teh victime where they would have been if the contract has been carried out = compensatory damage which is teh main typeof damages
there are different types of legal damages teh courts can award
- pecuniary losses (financial losses)
- non-pecuniary losses (such as mental distress)
- compensatory damages
- nominal damages
- sunstantial damages
- wrotham park damages
nominal damages
if there has been nothing actually lost form the breach of contract (therefore nothing to compensate e the claimant is still as of right allowed to claim for damages
staniforth v lyall
staniforth v lyall
if there has been nothing actually lost form the breach of contract (therefore nothing to compensate e the claimant is still as of right allowed to claim for damages
substantial damages (compensatory damages)
sometimes, these types of damages have been awarded where normally it would have been more appropriate to reward nominal damages
they are meant to be used when there has been actual loss
Experience Hendrix LLC v PPx Enterprise 20023
Experience Hendrix LLC v PPx Enterprise 20023
after the death of Jimi Hendrix, D had been granting license to exploit master recording containing work featuring Hendrix, which breached a settlement agreement they had in 19723. no evidence that hsowed a financial oss had been suffered but teh courts held that a reaosnable paymnet should be made more than just nominal
legal pricjiple - a reasonable payment hsoudl be made more than just nominal
wrotham park damages
this is rather than a compensatory damage
the claimant owned land which was subject to a restrictive covenant preventing building on it. However, the d build and sold the houses on the land. the claimant asked the court for an injunction order that the house be demolished. the courts would not grant an order of demolition of the houses on the basis that to do so would be unfair to inhabitants in the house instead the court decided to award damages to represent that the claimant might have accepted in exchange for the release of teh restrictive convenant (eventhough the claimant would never have agreed to this at any price)
- instead of working out how much teh innocent party has lost or how much the other party has gained, wrotham park damages try to quantify the sum which might reasonably have been negotiated between the parties - is a type of negotiated damages based on what the d would have been willing to pay to avoid the brech or keep teh claimant from taking certain action
the difficulty is not knowing where these should be awarded or nominal damages
- breach should involve an interference with a right that could have been subject to negotiation
- used when it is difficult to calculate the actual loss or damage suffered by the claimant
Morris - garner v Onestep Ltd 2016
legal prnciple - wortham park damages should be used where it is idfficukt to caluclaye actual or traditional loss and hwere teh d conduct is omething canbe negotiated
it is akey exampleof wrotham park dmages provides clarification on the use of Wrotham park damages
used when it is difficult to calculate the actual loss or damage suffered by the claimant
- a claimant sought damages for a breach of contract but it was hard to decide what damages tro award in traditional manner. instead the claimant sought Wrotham park damages which is a type of negotiated damages based on what the d would have been willing to pay to avoid the brech or keep teh claimant from taking certain action
the main takeaway form this case regarding wrotham park damages is
- wrotham park dmaages are not automatically available - this case made it clear that wrotham park damages are not an automati remedy . They should only be awarded in cases where the claimant can prove that they suffered a loss, buyt the loss cannot be precily calulated or is too difficult to quanitfy traditional terms
- you meassure what they defedant would have to pay the claimant to obtain a realise or license from the breach - essentially using teh wilingness to pay priciple
non - pecuniary losses (speculative damages)
general rule is that damages wont be awarded for non-pecuinary matter such as mental distress - Addis v Grampohone 1909
however the excpetion the rule is that damages can be awarded if teh sole purpose of teh contract was non- pecuinary
Addis v Grampohone 1909 b
general rule is that damages wont be awarded for non-pecuinary matter such as mental distress
jarvis v swan tours
legal priciple - exception of the pricniple in addis v gramphone is claimant can be awarded for non-pecuinary losses if the main purpose of teh contract was on non pecunary loss
however the exception of the general rule set out in addis v gramsphone whixh is that damages wont be awarded for non-pecuinary matters such as mental disstress howevever there is an exception of non-pecuinary losses . in thecae of Jarvis v swan tours is the exception damages can be awarded is the sole purpose of the contract was non- pecuinary
in this case the courts found that for disappointment would be awarded because the contract was entered into for specific provision of enjoyment and entertainment therefore he could get damages for being disappointed
chaplin v hicks
same as jarvis v swan tours where the claimant was awarded dmaages based on los of chnace
limitation of awarding damages
causation
remotenss
migration of loss
causation
the loss must have been caused by the breach of contract
quinn v burch brothers
quinn v burch brothers
breached the contract by not providing C with a step ladder as per tehri contract. C therefore used a testle table instead and fell and injured himself.
courts held that the breach provided the oppurtuunity for the injury but was not the cause ( they didnt make him use the trestle table)
it is thebut for test. but for the breach of contract would the claimant have suffered teh loss claimed
legal principle - losses must have been caused by the breach of contract if not damages wont be awarded
remoteness
d will only be libale for the losses taht were reaosnbale forseeable as arising form the breach
hadley v Baendale 1854
remotness is 2 type test
the first part is objective - what loss is antrual consequence of teh breach? ( in teh case below is it late delivery)
the second part is subjective - based on specific knowledge of potential losses inmids on both parties when teh contract is formed
hadley v Baendale 1854
a mill owner made a ocntract with a carrier to dleiver a crankshaft for his mill. The mill had be closed whilst wating for thecrankshift. The carrier did not knownthis. he said it would take one day however it was delayed and it took 7. C tried to cliam for loss of profit. courts heldf taht he could not claim becuase t was too remote - teh d did nit know that the C wouldhave to cose
legal priciple - d will only be libale for the losses taht were reaosnbale forseeable as arising form the breach
remotness is 2 type test
the first part is objective - what loss is antrual consequence of teh breach? ( in teh case below is it late delivery)
the second part is subjective - based on specific knowledge of potential losses in the minds on both parties when teh contract is formed
the test has been further developed in the case of Vectorial laundry Ltd v Newman industries Ltd (1949)
Vectorial laundry Ltd v Newman industries Ltd (1949)
contract to dleiver a boiler to teh laundry company but was not delivered until 5 months after the contract date. Laundry successfully sued loss of it usual prodits from the date of the breach. it was a natural consequence loss. Laundry aslo claimed for additional lost profits from a special contract that it has been unable to take up without the oiler. Claim failed as the specific contract was unknown to the D at the time teh contract was made.
legal pricipl e- further debeloped teh 2 part test for remoteness
- recoverabel loss should be measured agaisnt a tst of reaosnable forsebility
- foreseeability of loss is dependant on knowledge at the time the contract was made
- knowledge is two types; common knowledge and actual knowledge of the D. (what would be a reasonable man contemplate in the circumstances)
h parsons (livestck) v Uttley Ingham 1978
D installed a pig nut hopper. the ventalation hatch was sealed duirng transit. Installer forgot to open it. lack of ventilation caused the nuts to go mouldy and many pigs died eating theese mouldy nuts. Court held that the death of the pigs would have been within the contemplation of the parties when they made their contract, therefore damages was not too remote
held - what courts considered as not oto remote
- this shows that a crucial elemnt of remoteness is to determine what was in the contemplation of the parties at the time the contract was made
migration of loss
. claimants have to try and migrate their losses
- they cannot sit back and watch their losses grow
- they must try ad minimise them
Pilkington v wood 1953
Pilkington v wood 1953
C brought a house and D his solicitor negligently failed to notice that the house had a defective title. the solicitor was held liable for the amount by which the houses value had lessened due to the bad title. c shortly after took up work elsewhere and suffered added loss as the house was hard to sell. however, the solicitor was not liable for the later loss because he could not have anticipated that C was shortly move
- the claimant does not need to go to extreme lengths to migrate their losses though. Only need to do what is reasonable the circumstances
for example in an anticipatory breach, they are not bound to sue immediately ( which would automatically migrate tehir losses) - British wastinghouse electric v Underground Electric railways (1912)
British wastinghouse electric v Underground Electric railways (1912)
The court will balance the loss against gain when calculating the amount of damage
categories of recoverable damages
1) loss of a bargain - places the claimant in the same financial position as if the contract had been properly performed
to place the claimant in the same position can be seen in a number of ways
- the difference in the value of goods and services contracted for compared to wat they actually got
- if there is a market, damages will be the difference between contract and market price
-loss of profit not just for teh goods but the profit they could’ve made if they had the goods on time for e.g - loss of chance (this is a speculative loss and not usually recoverable but exception in Chaplin v Hicks
Reliance loss
the expense incurred by a claimant who relied on a contract being performed
Anglia television Ltd v reed 1972
Anglia television Ltd v reed 1972
spent lots on preparing for a film. reed agreed to be teh main actor but then pulled out. Couldn’t find a suitable replacemet so the flim wasnt made. anglia tv couldnt precit what its profit would be on the film
need to finsh
farley v skinner 2001
can also claim sometimes for the loss of an amenity - tehy wre bale to claim for satress nd discomfort
expectation loss
this is usual of damages for breach of contract. refers to the inncoent partys loss of baragin
includes profits it wouldve expected to recieve had teh contract been peformed
aim of expectation loss is to put the imcoent party in teh same postiion as if teh contract has been peformed
which is differenat to reliance of loss
Eastern expenditures. Expenses incurred by the claimant in reliance if the contract being oefromed, aim is to put the claimant in the position they would’ve been in if the contract hadn’t been made,
Can on,y use expectation or reliance, not both
Restitution
This is a repayment if any money or other benefit that were given to the defendant in advance of the contract that is breached
It restores money to them
Liquidated damages
- the amount of damages are fixed by a term in the contract
- courts will on,y accept if it is a accurate representation of loss
- if not, it is seen as a penalty and not enforceable
- how to determine, the difference between genuine liquidates damages and a penalty, as seen in Dunlop and pneumatic tyre
- extravagant sum will always be a penalty
- large sum for failures to pay a small debt us probably a penalty
- sing,e sum operating for many different breaches is probably a penalty
There is a rule outlines. Y the Supreme Court in cavendish square h9liding BV v tala el makdessi 2015
What is the rule outlined by Supreme Court in Cavendish Square holding BV v talal el makdessi (2015)
Involves the sake if a meddle eastern media business. The contract stated that if the seller didn’t comply with the terms of the contract preventing him from competing with the buyer, he would lose his right to future payment that would otherwise have been due to him and he would have to sell him remianinh shares to the buyer at a vreetky reduced price. Court held that the provisions contained in the agreement,mets were here to protect the legitimate interests of the
So under the new test, the party seeking to rely on the term must be able to show that the clause is to protect a legitimate interest and the amount is not unconscionable.
Not fixed. Juudges can still be subjective
Quantum merit
Three common circumstances where this is awarded will be made
1) if the contract for services where no price is stated
2) where the case shows that a fresh agreement can be implied in place of the original one
3) in discharge case where it is discharged via breach r the party has been prevented from full peformave
Equitable re,eddies
These are not legal remedies, they are not as of right now
Used when damages are inadequate
Not constrained by remoteness or causation
Specific performance
This is a type of equitable remedy
It krders one party to perform their contractual obligations
It is hard to grant specific performance
It will not. E granted in personal service cases, cases of employment implossibikity and when the court cannot supervise the enforcement
