Remedies and Damages Flashcards
1
Q
What are the two types of remedies?
A
- Legal Remedy
- Equitable Remedy
2
Q
What is a legal remedy?
A
- A court enforces damages by right
3
Q
What are the three types of damages?
A
- Nominal
- Compensatory
- Liquidated
4
Q
What are nominal damages?
A
- Nominal Damages: No financial loss but should be awarded as of right. Used when there is no expected loss or actual loss. There is no financial loss due to the contract not being completed however must recognize a breach. There is nothing to reimburse or profit lost. They will be awarded a nominal sum which is something of value
5
Q
What are compensatory damages?
A
- The main form of damages, awarded based on actual loss. This is the most common type of damage. The main aim is to put the claimant in the position they would have been in had the contract been properly performed
6
Q
What are the two ways to calculate compensatory damages?
A
- The two ways we calculate compensatory damages is through expectation or reliance loss.
7
Q
What is expectation loss?
A
- Seen in Robinson v Harman
- Compensation for what was expected from the contract
- This is a loss of bargain
- This is only the expected profit and not the expense incurred
- This is the first damage to begin with and most common
- Put the person in the position if the contract had been performed, it will calculate what is expected to be lost due to the breach
- Do not get money spent in preparation before the breach as they would have been necessary
8
Q
What is the calculation for expectation loss?
A
Loss of profits + Additional costs incurred due to breach - Costs saved by not performing
9
Q
What is reliance loss?
A
- Compensation for expenses incurred due to reliance on the contract
- Puts in place before contract ever happened
- The loss is too hard to quantify and unsure what the profits would have been
- Seen in Anglia Television v Reed
- Used when the profit is too uncertain to calculate or if the contract is invalid due to a vitiating factor
10
Q
What is the calculation for reliance loss?
A
- Wasted Expenditure (Money spent) incurred in reliance on the contract - Any benefit gained
11
Q
What are liquidated damages?
A
- This is when damages are fixed by an express term in the contract. It must be an accurate representation of loss as if not it would be seen as a penalty.
12
Q
How can you decide if it is a liquidated damage?
A
- Determine the difference between genuine liquidated damages and a penalty
- Must be a reasonable express term
- Established in Dunlop Pneumatic Tyre v Selfridge Co
- An extravagant sum will be a penalty
- A large sum for failure to pay a small debt is a penalty (Court Discretion)
- A single sum for different breaches is a penalty (Court Discretion)
13
Q
What are the three limitations of awarding damages?
A
- Causation
- Remoteness
- Mitigation of Loss
14
Q
What is causation?
A
- The losses must be caused by the breach of contract
- Using the But For Test
- Established in Quinn v Burch Brothers
15
Q
What is remoteness?
A
- Were the losses reasonably foreseeable arising from the breach?
- Seen in Hadley v Baxendale = This created a two part test
- The first part is whether it fits into an ordinary loss. This is a loss that a reasonable person would expect to happen if the breach has occurred. They would not be expected to tell the person about circumstances as a reasonable person would know that this would occur
- The second part is an unusual loss, losses that are not reasonably foreseeable but were made aware of the special circumstances before the breach. They must have actual knowledge of these special circumstances
- It was developed in Victoria Laundry v Newman Industries which focused on businesses
- Objective test of a reasonable person
16
Q
What is mitigation of loss?
A
- Must try mitigate/minimize their losses
- They cannot sit and watch their losses grow
- Seen in Pilkington v Wood
- After the anticipatory breach, they must not spend extravagantly but do not have to stop spending until the actual breach
- This is subjective based on what is reasonable in the circumstances
- Seen in case of White and Carter v McGregor
- The court will balance the loss against gain when calculating damages. This is seen in British Westinghouse Electric v Underground Electric Railways
17
Q
What are equitable remedies?
A
- Used when damages do not achieve justice and are inadequate
- It is subjective
- Not constrained by remoteness or causation
18
Q
What are the three types of equitable remedies?
A
- Restitution
- Quantum Merit
- Specific Performance
19
Q
What is restitution?
A
- Repayment of money or benefits given to the defendant in advance of the contract breach
- It restores their money to them
20
Q
What is quantum merit?
A
- Used for discharge of contract by performance
- Awarded in three circumstances
- Contract for services between two people with no price stated however one person is refusing to pay. They will award based on quantum merit
- A fresh agreement has been made replacing the original one. Quantum merit will be used based on what it is worth
- Discharge by breach or by prevention of performance
21
Q
What is specific performance?
A
- Orders one party to perform their contractual obligation
- Page One Records v Britton
- It is hard to grant specific performance
- Do not like to award it for personal services
- It will not be granted in certain circumstances
22
Q
What are the circumstances where specific performance will not be granted?
A
- Specifies an individual who is no longer available
- Were not agreed on with enough certainty to enable performance
- If it is an employment contract
- Require ongoing supervision
- Goods are no longer available
- No longer wishes the contract to be performed
- Cannot monitor performance to ensure performance is adequate
- Impossible to perform obligation
- Previously terminated the contract
- Not granted for personal services
