Remedies - Damages

Question 1

When will damages be awarded?

Answer 1

To the innocent party in a contract when they suffer a loss due to the breach of contract.

Question 2

What is the aim of damages?

Answer 2

To put the parties in the position they would have been in had the contract been successfully carried out.

Question 3

In which four circumstances can damages be awarded for loss?

Answer 3

• personal injury
• damage to property
• damage to economic position
• non-pecuniary loss.

Question 4

How does the law determine what damages should be awarded?

Answer 4

a) what interest does the innocent party have in the contract?
b) did the breach actually cause the loss
c) did the innocent party try to mitigate their loss?

Question 5

What are the three types of interests an innocent party can have in a contract?

Answer 5

Expectation interest, reliance interest and restitution interest.

Question 6

What does expectation interest focus on?

Answer 6

What the claimant expected to gain from the contract had it been successfully performed.

Question 7

What does reliance interest focus on?

Answer 7

The expenditure which has been wasted as a result of the contract being breached.

Question 8

Give the facts of Anglia television v Reed

Answer 8

ATV hired an actor for their new film but it later transpired that this clashed with another movie he had already agreed to film. they trued to find another actor but could not find one suitable. they had no idea how much the movie was going to make but knew how much they had spent on production so were able to claim their reliance interest.

Question 9

Give the facts of Manson v Burningham

Answer 9

C bought a typewrite from D and paid for repairs for it. it later transpired that D had no title/right to sell the typewriter. the person from whom it was stolen was able to recover it from the C. C sued for the price she paid for the typewriter as well as the price she paid for the repairs to the typewriter. the spent money was her reliance interest and she was entitled to it.

Question 10

What rule did Manson v Burningham establish?

Answer 10

the party in breach will be liable for wasted expense if it was within the parties’ reasonable contemplation that expense would be incurred

Question 11

What if a party has both a reliance interest and an expectation interest?

Answer 11

you are free to choose whether to sue for expectation interest or reliance loss. expectation loss can always be recovered providing it can be proven

Question 12

What rule does PJ Spillings v Bonus Flooring illustrate?

Answer 12

A party cannot choose to recover their reliance loss if it means they would recover more by way of damages than they would have if the contract had been properly performed.

Question 13

Give the facts of PJ Spillings v Bonus flooring

Answer 13

Spillings had a building contract and hired Bonus as a subcontractor but later breached this contract by terminating their engagement improperly. B sued S for reliance interest because if they had fulfilled the contract, they would be losing money.

Question 14

What did the court say in PJ Spillings v Bonus Flooring?

Answer 14

Where your reliance loss is greater than your expectation loss you cannot claim your reliance loss.

Question 15

Can you claim both your expectation interest and your reliance interest?

Answer 15

No that would be double recovery and you would be overcompensated.

Question 16

What is restitution interest?

Answer 16

Recovery of the full purchase price

Question 17

When will restitution interest be granted?

Answer 17

where there has been a total failure of consideration.

Question 18

What does restitution interest cover?

Answer 18

matters such as recovering the purchase price or a deposit paid under a contract. essentially a full refund.

Question 19

what is non-pecuniary loss?

Answer 19

loss of enjoyment. damages for disappointment/inconvenience.

Question 20

What is the general rule regarding non-pecuniary loss?

Answer 20

damages are not available for injury to feelings caused by a breach of contract

Question 21

Which case sets out the general rule regarding non-pecuniary loss?

Answer 21

Addis v Gramophone co ltd.

Question 22

Give the facts of Addis v Gramophone co ltd.

Answer 22

A was employed by G and was dismissed from his post in a manner which discredited him from the commercial scene in calcutta. he sought damages for the oppressive way in which he was treated

Question 23

What is the first exception to the general rule on non-pecuniary loss?

Answer 23

Where a major or important object of the contract is the provision of pleasure

Question 24

Give the facts of Farley v Skinner

Answer 24

Claimant got surveyor to see if his house was on a Gatwick flight path. Surveyor said it wasn’t but it later transpired that the house was under a stacking zone for planes and the house was much affected by airplane noise.

Question 25

What was the decision of the court in Farley v Skinner?

Answer 25

Court found the surveyor had been negligent. there was no difference in value for the house and no possibility of cost of cure, so the court said there was loss of amenity and granted some damages.

Question 26

Give the facts of Jarvis v Swan tours

Answer 26

J booked a skiing holiday with ST the brochure advertised parties and other events. none of which occured. he had paid £63 for the holiday.

Question 27

How much did the court award Jarvis

Answer 27

£125.

Question 28

What is the second exception to the rule on non-pecuniary loss?

Answer 28

Where the breach caused physcial inconvenience and mental suffering which is directly related to that inconvenience.

Question 29

Give the facts of Watts v Morrow

Answer 29

Surveyor conducted report negligently and said the house needed no work. really it needed a lot of expensive structural work. having the house full of builders is inconvenient and they sought damages. they were granted because of the physical inconvenience and mental suffering it caused.

Question 30

What type of contract does non-pecuniary loss not apply to?

Answer 30

Commercial contracts.

Question 31

Do non-pecuniary damages recover all of the loss caused by the breach?

Answer 31

No, not usually, it is usually less than the loss caused.