Remedies for Breach of Contract Flashcards
What is the point of damages in contract?
To put the party back in the position they would have been in had the contract been properly performed
(Robinson v Harman)
Will a sum be awarded for “loss of amenity”?
Yes, a discretionary sum may be awarded for loss of amenity if the contract’s aim was to bring pleasure
(Ruxley Electronics)
Will a sum be awarded for distress or disappointment?
No
(Addis v Gramophone)
Unless the purpose of the contract was to cause enjoyment or pleasure
(Jarvis v Swan’s Tours)
Will damages be awarded for costs prior to contract?
Yes, if they were in the reasonable contemplation of the parties
Anglia TV v Reed?
Will there be damages for lost opportunities?
Yes
(Chaplin v Hicks)
For damages to be awarded on the basis of loss of enjoyment, will that need to be the sole object of the contract?
No, loss of enjoyment need only be a part of the reason for contracting
(Farley v Skinner)
What are the two limbs of Hadley v Baxendale?
- The loss must arise naturally from the breach
- The loss must be in the reasonable contemplation of the parties at the time of contract
Do claimants have a right to damages that are suprisingly high but were in the reasonable contemplation of the parties?
Yes
(Parsons (Livestock) Ltd v Uttley Ingham Ltd)
Do claimants have a right to claim for damages that are of a different type to those expected or lucrative failed opportunities?
No
(Victoria Laundry v Newman Industries)
Do claimants have to mitigate their loss?
Yes, and they can claim for any costs involved in mitigation
(British Westinghouse)
What point is the quantum of damages measured from?
The point of breach
(The Golden Victory)
Are penalty clauses enforceable? What distinguishes penalty clauses from specified damages clauses?
Penalty clauses are not enforceable. Pentalty clauses are distinguised in the following ways
- If the sum is “extravagent or unconscionable” it will be a penalty clause.
- If the sum owed is bigger than the amount owed it will be a penalty clause
- If a single lump sum is payable in a range of different scenarios it wil be a penalty clause
(Dunlop v New Garage)
When is an “action for an agreed sum” a possible claim?
When the date at which the money is due has passed
What was the result in Page one Records v Britton?
The court refused to order the band not to hire another manager
What are two possible remedies for the wrongful prevention of performance by the other party?
- A quantum meruit sum, which is the reasonable amount for the work done
OR
- An action for damages for a breach of contract
(Planche v Colburn)
In which case was it ruled that contractual obligations are strict and partial performance will not discharge them?
Cutter v Powell
What is the remedy when the other party voluntarily accepts partial performance?
A quantum meruit sum
(Sumpter v Hedges)
Which two cases contradict on substantial performance?
Hoenig v Isaacs
Full payment due, less costs of defects. Substantial performance found
and
Substantial performance not found. Deposit retained but nothing else
Bolton v Mahadeva
What are divisible obligations?
If a contract has been divided into distinct parts or stages with payment specified for each part, then a party who has completed a part is entitled to be paid for the part completed. Each stage is treated as a seperate contract
What are the 4 exceptions to the doctrine of complete performance in Cutter v Powell
- Wrongful prevention of performance (Planche v Colburn). Remedy: damages or quantum meruit
- Voluntary acceptance of partial performance (Sumpter v Hedges). Remedy: quantum meruit sum.
- Substantial performance (Hoenig v Isaacs; Bolton v Mahadeva) Remedy: The full contract price less an amount for defects
- Divisible obligations. Remedy: Only paid for the obligations met
What is the original common law rule on frrustration?
What is the definition of frustration?
The destruction of the value of the performance that has been bargained for as a result of a supervening event.
The destruction of the subject matter will frustrate a contract. Which case?
Taylor v Caldwell
Will a contract becoming less profitable frustrate it?
No.
(Davis Contractors v Fareham UDC)
Will the absence of a key person frustrate a contract?
Yes
(Condor v Barron Knights)
Will the non occurrence of an event frustrate a contract? Which two cases contradict?
Yes
(Krell v Henry)
No
(Herne Bay v Hutton)
Will government intervention frustrate a contract?
Yes
(Metropolitan Water Board v Dick Kerr)
Will illegality and/or war frustrate a contract?
Yes
(Fibrosa Spolka v Fairbairn Lawson)
What contract term often deals with frustration?
Force Majeure
Will self induced frustration be valid?
No
(The Super Servant Two)
Can frustration occur to a lease of land?
Potentially, but not often
(Panalpina)
What does s1(2)of the Law Reform (Frustrated Contracts) Act 1943 say?
- iAccording to S1(2) of the act, money paid prior to the frustrating event can be recovered and money payable does not have to be paid.
2.
A comedian is due to perform on a cruise ship when it sinks. He has been paid a £100 deposit and is due to be paid £5000 three weeks after the boat sinks. What is the situation?
The cruise ship company can claim back the £100.
The comedian can claim any expenses up to £100
The £5000 is not owed.
Steve books a Thomas Cook holiday to Georgia for which he pays £2000. Georgia is then invaded by Russia and the Foreign Office bans all flights. What is the situation?
Steve can claim back the £2000. Thomas Cook can claim any expenses up to £2000.
What is the rule in Gamerco
According to the decision in Gamerco the courts have a “wide discretion” on the apportionment under S1(2)
What is the rule in S1(3) of the Act?
iAccording to S1(3) of the Act if a “valuable benefit” has been gained by either party by performance of the contract before the frustrating event, then they should pay a “just sum” for that benefit. In BP v Hunt it was ruled that the courts would decide what a “just sum” is in each circumstance.
What is the rule in BP v Hunt?
In BP v Hunt it was ruled that the courts would decide what a “just sum” is in each circumstance when referring to s1(3) of the Act..
