Remedies for Breach of Contract

Question 1

What is the point of damages in contract?

Answer 1

To put the party back in the position they would have been in had the contract been properly performed

(Robinson v Harman)

Question 2

Will a sum be awarded for “loss of amenity”?

Answer 2

Yes, a discretionary sum may be awarded for loss of amenity if the contract’s aim was to bring pleasure

(Ruxley Electronics)

Question 3

Will a sum be awarded for distress or disappointment?

Answer 3

No

(Addis v Gramophone)

Unless the purpose of the contract was to cause enjoyment or pleasure

(Jarvis v Swan’s Tours)

Question 4

Will damages be awarded for costs prior to contract?

Answer 4

Yes, if they were in the reasonable contemplation of the parties

Anglia TV v Reed?

Question 5

Will there be damages for lost opportunities?

Answer 5

Yes

(Chaplin v Hicks)

Question 6

For damages to be awarded on the basis of loss of enjoyment, will that need to be the sole object of the contract?

Answer 6

No, loss of enjoyment need only be a part of the reason for contracting

(Farley v Skinner)

Question 7

What are the two limbs of Hadley v Baxendale?

Answer 7

1. The loss must arise naturally from the breach
2. The loss must be in the reasonable contemplation of the parties at the time of contract

Question 8

Do claimants have a right to damages that are suprisingly high but were in the reasonable contemplation of the parties?

Answer 8

Yes

(Parsons (Livestock) Ltd v Uttley Ingham Ltd)

Question 9

Do claimants have a right to claim for damages that are of a different type to those expected or lucrative failed opportunities?

Answer 9

No

(Victoria Laundry v Newman Industries)

Question 10

Do claimants have to mitigate their loss?

Answer 10

Yes, and they can claim for any costs involved in mitigation

(British Westinghouse)

Question 11

What point is the quantum of damages measured from?

Answer 11

The point of breach

(The Golden Victory)

Question 12

Are penalty clauses enforceable? What distinguishes penalty clauses from specified damages clauses?

Answer 12

Penalty clauses are not enforceable. Pentalty clauses are distinguised in the following ways

1. If the sum is “extravagent or unconscionable” it will be a penalty clause.
2. If the sum owed is bigger than the amount owed it will be a penalty clause
3. If a single lump sum is payable in a range of different scenarios it wil be a penalty clause

(Dunlop v New Garage)

Question 13

When is an “action for an agreed sum” a possible claim?

Answer 13

When the date at which the money is due has passed

Question 14

What was the result in Page one Records v Britton?

Answer 14

The court refused to order the band not to hire another manager

Question 15

What are two possible remedies for the wrongful prevention of performance by the other party?

Answer 15

1. A quantum meruit sum, which is the reasonable amount for the work done

OR

2. An action for damages for a breach of contract

(Planche v Colburn)

Question 16

In which case was it ruled that contractual obligations are strict and partial performance will not discharge them?

Answer 16

Cutter v Powell

Question 17

What is the remedy when the other party voluntarily accepts partial performance?

Answer 17

A quantum meruit sum

(Sumpter v Hedges)

Question 18

Which two cases contradict on substantial performance?

Answer 18

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

Question 19

What are divisible obligations?

Answer 19

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

Question 20

What are the 4 exceptions to the doctrine of complete performance in Cutter v Powell

Answer 20

1. Wrongful prevention of performance (Planche v Colburn). Remedy: damages or quantum meruit
2. Voluntary acceptance of partial performance (Sumpter v Hedges). Remedy: quantum meruit sum.
3. Substantial performance (Hoenig v Isaacs; Bolton v Mahadeva) Remedy: The full contract price less an amount for defects
4. Divisible obligations. Remedy: Only paid for the obligations met

Question 21

What is the original common law rule on frrustration?

Question 22

What is the definition of frustration?

Answer 22

The destruction of the value of the performance that has been bargained for as a result of a supervening event.

Question 23

The destruction of the subject matter will frustrate a contract. Which case?

Answer 23

Taylor v Caldwell

Question 24

Will a contract becoming less profitable frustrate it?

Answer 24

No.

(Davis Contractors v Fareham UDC)

Question 25

Will the absence of a key person frustrate a contract?

Answer 25

Yes

(Condor v Barron Knights)

Question 26

Will the non occurrence of an event frustrate a contract? Which two cases contradict?

Answer 26

Yes

(Krell v Henry)

No

(Herne Bay v Hutton)

Question 27

Will government intervention frustrate a contract?

Answer 27

Yes

(Metropolitan Water Board v Dick Kerr)

Question 28

Will illegality and/or war frustrate a contract?

Answer 28

Yes

(Fibrosa Spolka v Fairbairn Lawson)

Question 29

What contract term often deals with frustration?

Answer 29

Force Majeure

Question 30

Will self induced frustration be valid?

Answer 30

No

(The Super Servant Two)

Question 31

Can frustration occur to a lease of land?

Answer 31

Potentially, but not often

(Panalpina)

Question 32

What does s1(2)of the Law Reform (Frustrated Contracts) Act 1943 say?

Answer 32

1. 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.

Question 33

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?

Answer 33

The cruise ship company can claim back the £100.

The comedian can claim any expenses up to £100

The £5000 is not owed.

Question 34

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?

Answer 34

Steve can claim back the £2000. Thomas Cook can claim any expenses up to £2000.

Question 35

What is the rule in Gamerco

Answer 35

According to the decision in Gamerco the courts have a “wide discretion” on the apportionment under S1(2)

Question 36

What is the rule in S1(3) of the Act?

Answer 36

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.

Question 37

What is the rule in BP v Hunt?

Answer 37

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..