Week 8 - Awarding Damages Flashcards
What are the two key questions court ask themselves when awarding damages?
- is the loss too remote
- how do we quantify the loss
The general rules for assessing damages include which 2 considerations?
- do the damages arise naturally in the normal and ordinary course of the contract
- are the damages within the ‘reasonable contemplation’ of the parties (depends on probability of loss and knowledge of defendant)
Remoteness of damage
An injured party can only recover damages for:
- loss resulting naturally from the breach of contract, in the usual course of events
- loss which was reasonably in contemplation of the parties when the contract was made - did other party know the additional impacts their breach would have?
Quantum of damage - what are the three bases of assessment?
- loss of a bargain
- reliance loss
- restitution - where defendant has to repay money they had in advance of contract being performed
What is the duty to mitigate losses?
If you are the injured party, but you keep quiet about knowing you have been lied to, your compensation will be lower
What is the difference between expectation loss and reliance loss when awarding damages?
Expectation is what you could have expected to gain if the performance of the contract had gone ahead
Reliance is what are you out of pocket from - easier to quantify
Between expectation and reliance loss, which will courts always go with first?
Expectation loss, if it could be quantified
What if performance is unsatisfactory but the cost of cure is excessive?
Loss of amenity - where courts believe the claimant would benefit as they would take compensation money and not use it to rectify the situation
^^ pool case
What is a liquidated damages clause?
When parties were making the contract, they put in a figure as to what should be paid if something goes wrong - has to be fair
What happens if a liquidated damages clause appears excessive?
It switches to being labelled as a penalty clause - courts pick a different outcome
