Unit 3.1- Remedies

Question 1

What is the main remedy of breach of contract?

Answer 1

Damages

Question 2

What does ARMM stand for?

Answer 2

Aim- to compensate the claimant
Remoteness- within the contemplation of parties (Hadley Baxendale)
Measure- reliance (Anglica TV v Reed) or expectation loss (Robinson v Harman)
Mitigation- has the claimant taken reasonable steps to mitigate their loss?

Question 3

What should be considered in relation to expectation loss?

Answer 3

Difference in value of goods
Cost of Cure 
Loss of amenity 
Lost opportunity (Chaplin v Hicks) 
Lost pleasure (Addis v Gramaphone, Jarvis v Swan's Tours, Farley v Skinner)

Question 4

What is expectation loss?

Answer 4

Putting the claimant back in the position they would have been in had the contract been properly performed (Robinson v Harman)

Question 5

What is reliance loss?

Answer 5

Putting claimants in position they would have been in had the contract never been entered into in the first place (Anglia TV v Reed)

Question 6

What has to be considered when measuring damages?

Answer 6

Remoteness
Mitigation
The time being assessed
Specific damages/ penalty clause

Question 7

How do you decide specific damages/ penalty clauses?

Answer 7

Dunlop Pneumatic Tyre Co- question of construction

Sum stated extravagant/ unconscionable compared to greatest loss that could be proved to have followed- PC

Breach consists of not paying- PC

Single sum due on happening of one or more events that can cause a range of damage, presumed PC

Saying PC/ SD not conclusive

Question 8

Define Specific damages

Answer 8

A genuine attempt to pre-estimate loss, can be enforced

Question 9

Define penalty clause

Answer 9

An attempt to put pressure on a party to perform their part of the contract

Question 10

Available remedies?

Answer 10

Damages

Restitution

Action for Agreed Sum

Equitable remedies- specific performance/ injunction

Question 11

What is the remoteness rule?

Answer 11

Hadley v Baxendale- was the damage caused due to an ordinary course of dealings and if not were the special course of dealings known to the parties at the time the contract was entered into?

Question 12

Case law re remoteness?

Answer 12

Victoria Laundry- profits that are highly lucrative/ special are too remote

Parsons (Livestock) v Uttley Ingham- if the type of loss is foreseen then the extent of that loss is also foreseen

Brown v KMR- distinguish between special profits and high profits

Balfour Beatty- HoL said Scottish Power not liable for full loss suffered by claimant as a result of an interruption in the electricity supply

Question 13

What does British Westinghouse say?

Answer 13

Claimant must take reasonable steps to mitigate loss and he can claim expenses incurred in trying to do so even if attempt is unsuccessful

Question 14

What is the rule re time assessment for damages?

Answer 14

Damages are assessed by reference to time of breach (e.g. cost of goods at time of breach)

However, aim of damages is to put claimant in position he should have been in had contract been performed

Latter prevails (The Golden Victory) so if time assessment rule doesn’t allow this, don’t use it

Question 15

Action for agreed sum

Answer 15

Not a damages claim so remoteness and mitigation rules do not apply

Question 16

When can a party terminate the contract?

Answer 16

Depends on what has been breached
Condition- sue and end
Warranty- less serious, sue
Innomiate term depends on HKFS

Question 17

What does Hong Kong Fir Shipping tell us?

Answer 17

Existence of an innominate term

Party can either affirm or terminate contract (as well as sue) if the breach deprives the innocent party substantially of the whole benefit