remedies and damages prt2 Flashcards
remedies are divided into the three:
1 legal remedies common law remedies
2 Equitable remedies
3 remedies under a specific statue
Damages;
The concept of damages is to put the claimant ( the injured party) into the position the would have been in the contract had not been breached.
damages are a legal remedy because they are available as of right if the contract has been breached ie they are entitled to it
there are different type of damages the court can award:
pecuniary losses which is financial losses
non- pecuniary losses such as mental distress
courts will look at the case facts and award damages in an attempt to place the victim where they would have been if the contract had been carried out.
nominal damages
if there has been nothing actually lost from the breach of contract and therefore nothing to compensate the claimant is still as of right allowed to claim for damages
staniforth v Lyall 1830
Lyall was under a duty to load his cargo onto the claimants boat by a certain date. he didn’t so sued for breach . s hired his boat out immediately to another party for a greater profit than he would of made from l. He succeeded in his breach and therefore the contract was terminated repudiated but having suffered no loss was awarded a nominal sum only.
what are substantial damages?
These are compensatory damages
sometimes these types of damages have been awarded where normally it would have been more appropriate to award nominal damages.
Theses are meant to be used when there has been an actual loss.
Experience Hendrix LLc v PPX Enterprises 2003
After the death of Jimi Hendrix, d had been granting licences to exploit master recordings containing works featuring Hendrix , which breached a settlement agreement they had in 1973. No evidence that showed a financial loss had been suffered but the courts held that a ‘reasonable ‘ payment should be made more than just nominal.
what is wrotham park damages ?
this is rather than a compensatory damage . negotiating
instead of working out how much the innocent party has lost or how much the other party has gained, wrotham park damages try to quantify the sum which might reasoanably have been negotiated between the parties .
the difficulty is not knowing when these should be awarded or nominal damages.
the general rule is that they can be used where the claimant would have very real problems in establishing financial loss. or when trying to regain the value of a benefit from the other party . If the defendant has used something of the claimants but not to the claimants detrimen, there is no identifiable loss.
the damages are based on the reasonable price for the defendant using whatever it isof the claimants e.g in Wrotham park the claimants hadn’t lost anything when they built the 14 houses but the defendants have obtained a benefit. Lord denning stated that the damages is identified by ‘ the test of the measure of damages is not what the plaintiffs have lost but what benefit the defendant obtained by having the use.
usual compensatory damages are identifiable losses from the claimant but wrotham park is when the other party has recieved a benefit and therefore using nominal damges would be unjust
Wrotham park estate co . Ltd parkside Homes ltd 1974
The claimant owned land which was subject to a restrictive covenant preventing building on it. However the defendant built and sold houses on the land. The claimant asked the court for an injunction order that the houses be demolished. The court would not grant an order for the demolition of the houses , on the basis that to do so would be unfair to the inhabitants of the houses. Instead, the court decided to award damages to represent the amount the claimant might have accepted in exchange for the release of the restrictive covenant even though the claimant would never have agreed to this at any price.
Morris - Garner v one step Ltd 2016
Highlights compensation damages should be used when possible instead of Wrotham park damages.
usually be awarded if : it is to do with non - competition clauses
intellectual property
land laws / restrictive covenants
difficulty in quantifying the loss
the defendant has benefitted but the claimant hasn’t lost anything
what are non pecuniary losses?
speculative damages
the general rule is that damages wont be awarded for a non- pecuniary matter such as mental distress. Addis v Gramophone 1909
However, the exception to the rule is that damages can be awarded if the sole purpose of the contract was non pecuniary.
For example in the case of Jarvis v swan tours the courts found that damages for disappointment would be awarded because the contract was entered into for the specific provision of enjoyment and entertainment therefore he could get damages for being disappointed.
This is also the case in Chaplin v Hicks where the claimant was awarded damages based on the loss of chance
what are the limitations of awarding damages
causation
remoteness
mitigation of loss
causation
the losses must have been caused by the breach of contract
to prove the breach of contract has caused the loss
it is the but for test. but for the breach of contract would the claimant have suffered the loss claimed
Chaplin v hicks
claimant deprived of a beauty contest and an audition as an actor as a result of breach in contract she was awared damages on the bassi she had been deprived the percent chance of being engaged as an actor.
Quinn v Burch Brothers
They breached the contract by not providing c with a step ladder as per their contract. C therefore used a trestle table instead and fell and injured himself. Tried to claim from D damages. However, the courts held that the breach provided the opportunity for the injury but was not the cause they didn’t make him use the trestle table.
Remoteness
D will only be liable for losses that were reasonably foreseeable as arising from the breach.
Remoteness is a two part test
the first part is objective - what loss is a natural consequence of the breach?
the second part is subjective - based on specific knowledge of potential losses in the minds of both parties when the contract is formed
this test has been further developed in later cases.
test further developed is:
recoverable loss should be measured against a test of reasonable foreseeability
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 a reasonable man contemplate in the circumstances
Hadley v Baxendale 1854
a mill owner made a contract with a carrier to deliver a crankshaft for his mill. The mill had to be closed whilst waiting for this part. The carrier did not know this. He said it would take one day but was delayed and it took 7. c tried to claim for loss profits . The courts held that he could not claim because it was too remote- the D did not know that the c would have to close.
Victoria Laundry Ltd Newman Industries Ltd 1949
Contract to deliver a boiler to the laundry company but was not delivered until 5 months after the contract date. Laundry successfully sued for loss of its usual profits from the date of the breach. It was natural consequences loss . Laundry also claimed for additional lost profits from a special contract that it had been unable to take up without the boiler. claim failed as the special contract was unknown to the D at the time the contract was made.
H Parsons Livestock v Uttley Inghams 1978
The defendants had installed a pig nut hopper. The ventilation hatch was sealed during transit. The installers then forgot to open it. Lack of ventilation caused the nuts that were added by the customer to go mouldy. Many pigs died from eating the mouldy nuts. The court held that the death of the pigs would have been within the contemplation of the parties when they made their contract therefore damages were not too remote.
courts considered as not too remote
this shows that a crucial element of remoteness is to determine what was in the contemplation of the parties at the time the contract was made.
Mitigation of loss
claimants have to try and mitigate (reduce) their losses
they cannot sit back and watch their losses grow
they must try to minimise them
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 would shortly move.
the claimant does not need to go to extreme lengths to mitigate their loss though. only needs to do what is reasonable in the circumstances.
for example in an anticipatory breach, they are not bound to sue immediately which would automatically mitigate their loss.
British Westinghouse electric v underground electric railways 1912
the goods delivered were defective. The railway company purchased replacements, which turned out to be more efficient than the original ones. They obtained benefits over and above what they would have got from the original contract. The court said that additional benefits obtained as a result of taking reasonable steps to mitigate loss were to be accounted for when calculating damages. The court will balance the loss against gain when calculating the amount of damages.
categories of recoverable loss
1 loss of bargain - places the claimant in the same financial position as if the contract had been properly performed.
- to place the claimant in the same financial position can be seen in a number of ways:
the different in value of the goods and services contracted for compared to they actually got.
if there is a market damages will be the difference between contract and market price
- loss of profit not just for the goods but the profit the could’ve made if they had the good on time
loss of a chance this is a speculative loss and not usually recoverable but exception in chaplin v hicks
2 reliance loss - the expense incurred by a claimant who relied on a contract being performed
Anglia Television Ltd v Reed 1972
Anglia tv spent lots on preparing for a film. Reed agreed to be the main actor but then pulled out. couldnt find a suitable replacement so the film wasnt made Anglia tv couldnt predict what its profit would be on the
