Types Of Remedies In Contract

Question 1

3 types of remedies for contract

Answer 1

• Legal Remedies
• Equitable Remedies
• Statutory Remedies

Question 2

What are legal remedies

Answer 2

• Damages or rights with respect to the goods.

• Goods can be rejected, contract repudiated and so on.

• Common law. Breaches can result in ending a contract where:
- Breach of condition or innominate term judged to be a condition.
- One party refuses to perform their obligations, or a substantial part – anticipatory breach.
- One party makes it impossible to perform the contract.
• Sellers’ rights with respect to the goods – Sale of Goods Act 1979 ss 38- 48.

Question 3

Sellers’ rights with respect to the goods – Sale of Goods Act 1979 ss 38- 48… Three specific rights for a seller of goods who remains unpaid:

Answer 3

1. Lien – right to hold onto the goods until the debt is paid.
2. Stopping goods in transit and regaining possession of them in cases of insolvency of buyer.
3. A right to resale.

Question 4

• Consumers’ rights and remedies with respect to goods:

Answer 4

1. Short-term right to reject – s 20.
2. Right to repair or replacement – s 23.
3. Right to price reduction or final right to reject – s 24

Question 5

Nominal Damages

Answer 5

a very small amount that can be awarded if no loss has been suffered, but there has still been a breach. In Staniforth v Lyall (1830), there was a breach, but the claimant had since hired the boat in question to somebody else for a higher profit, so hadn’t lost out. He still received a smaller, nominal sum as damages.

Question 6

One example of a nominal amount to be decided by the court…

Answer 6

…is a ‘Wrotham Park’ award. This is when the court will award an amount of damages when the claimant would have very real problems in establishing financial loss. Equitable or just response.

Question 7

Speculative Damages

Answer 7

courts are reluctant to award these, however if the claimant can prove that the speculative damages are reasonably likely to occur, he can recover the damages up to the amount that is reasonably likely to occur. The damages do not have to be proven with absolute certainty, only reasonable certainty.

In Ruxley Electronics and Construction Ltd v Forsyth (1996), Forsyth tried to argue that because Ruxley had completed a swimming pool at his home with 10% less depth, this would lead to a drop in the value of his house. The cost to correct this would have equalled the original cost of the pool itself. This was not reasonable, although the court did award Forsyth £2500 for loss of amenity.

Question 8

Test for remoteness of damage and Causation

Answer 8

• A test was established in Hadley v Baxendale (1854):
1. Was the loss that occurred a natural consequence of the breach? (Objective test).
2. Was the defendant aware of the potential losses as a result of the breach? (Subjective test).
• This was modified in Victoria Laundry Ltd v Newman Industries Ltd (1949).
1. Recoverable loss should be measured against a test of reasonable
foreseeability.
2. This foreseeability should be dependent on knowledge at the time the contract was made.
3. The knowledge should be both common knowledge and the actual knowledge of the defendant.