Remedies (Damages)

Question 1

What are the two types of remedies?

Answer 1

-Legal: come from common law. Main legal remedy is damages
-Statutory: come from act of parliament

Question 2

Consumer rights act 2015, when does it apply and what remedies does it give?

Answer 2

-Consumer trader contracts
-Return, refund, repair/replace

Question 3

Law reform (frustrated contracts) Act 1943, when does it apply and what remedies does it give?

Answer 3

-If a contract has ended because it cannot be carried out due to unforeseen circumstances
-Any money paid gets repaid, if money due after then no compensation payable, any money owed you don’t have to pay. Any money paid or due to be paid before external factor will be ordered sum compensation deducted from this to cover work done. If obtained a benefit then will have to pay a sum

Question 4

Substantial performance remedy

Answer 4

-Quantum meruit damages for substantial performance, eg if performance was incomplete but one of the exceptions to cutter applies.

Question 5

Equitable remedies
-what law are they developed from
-what can they be and what does this mean for judges
-names of any equitable remedies

Answer 5

-Rules by law of equity
-Discretionary so the judge can choose whether to give them if they are appropriate
-Restitution: never damages (economic duress) restore the money obtained by the threat
-Recission (misrep) go back to the pre-contract state, could get damages

Question 6

What are damages?

Answer 6

-Legal/common law remedy
-A right if the claimant has won an action for BOC
-C receives some damages even if haven’t lost anything
-Court must try to put them in the position they were in if the contract would’ve occurred. Damages can be claimed for financial losses from non-performance (loss profits, physical damage, harm)

Question 7

What are the types of damages?

Answer 7

-Nominal
-Damages for loss of amenity/speculative damages
-Liquidated damages

Question 8

When are nominal damages awarded?

Answer 8

-If no loss if actually suffered but there is a breach and the C has won
-usually small token eg £10

Question 9

Why may someone claim for nominal damages?

Answer 9

-Staniforth v Lyall
-For certainty and to prove that the contract has ended if it is a condition

Question 10

What are Wrotham park/negotiating damages?

Answer 10

-Rare. Achieve justice when been no loss but justice served by making D may more than nominal damages
-Court awards what they think C would charged d to allow them to breach contract like that

Question 11

How do nominal and negotiating damages link to law and justice?

Answer 11

-Example of court trying to achieve justice through remedies

Question 12

History of damages for loss of amenity

Answer 12

-Didn’t used to allow compensation for things which aren’t easy to calculate in financial terms eg loss reputation or mental distress
-from 1970’s courts allowed damages for some losses if the whole or main purpose of the contract was pleasure (holiday, entertainment, tickets)

Question 13

What are the 4 case names for loss of amenity?

Answer 13

-Jackson v Horizon Holidays
-Jarvis v Swan Tours
-Ruxley Electronics v Forsyth
-Farley v Skinner

Question 14

Jackson v Horizon holidays

Answer 14

-Loss of amenity damages awarded to C and family for disappointing holiday, whole purpose was pleasure

Question 15

Jarvis v Swan Tours

Answer 15

-Loss of amenity damages awarded to C for disappointing holiday. Main purpose of contract is pleasure

Question 16

Ruxley Electronics v Forsyth

Answer 16

-Loss of amenity damages awarded to C of $2,500 because the cost of rebuilding the pool to the correct depth ($21,650) was totally unreasonable and would’ve made no difference to the value of the house. Didn’t know that they would use it to rebuild pool to correct depth as perfectly usable and would make no difference

Question 17

Farley v Skinner

Answer 17

-Loss of amenity damages awarded to C of $10000 for discomfort of suffering aircraft noise. Doesn’t matter is pleasure wasn’t the main purpose of the contract as long as it was an important part and this was known to dft. Surveyor said not in flight path and wouldn’t be affected by noise, got wrong and was very close to air traffic control centre where planes would circle

Question 18

How are damages calculated? (Always apply)

Answer 18

1- court decides which losses need to be compensated (remoteness principle)
2- court decides how much compensation should be awarded for these losses (loss of bargain principle)

Question 19

Key case for causation and remoteness of damage principle (which losses the C can claim for)

Answer 19

Hadley v Baxendale
- carrier late with delivery of crank shaft. Unaware that mill didnt have a spare.
-couldn’t claim for loss of profit due t crankshaft as didnt know.
-C could claim for 1 losses which arose naturally from breach (obj) common knowledge of potential losses from breach. 2 possible losses specifically known about to both parties at time contract formed.
-can’t claim for losses not know about as too remote

Question 20

2 part test from Hadley

Answer 20

1.(objective) Common knowledge of potential losses from D’s breach
2. (Subjective) Parties actual knowledge of potential losses. In Hadley the loss was too remote

Question 21

How did the Hadley test apply to a case?

Answer 21

-Victoria laundry v Newman
-Late delivery of a boiler for C’s laundry business. C could claim for 1. Loss of usual profits (natural consequence). Could not claim for additional losses from special contract it had not been able to perform without the new boiler (not reasonable to expect D to have known about this)

Question 22

What is it cannot be proved that the D was aware of the possibility of that kind of loss?
-What case does this occur?

Answer 22

-Court may say it is implied that the D was aware as a reasonable person would have been aware
-Czarnikow v Koufos (The Heron II)

Question 23

Czarnikow v Koufos (The Heron II)

Answer 23

-Late delivery of a cargo of sugar. Lost profit due to fall of market value during delay
Held this loss could be compensated as even tho D didnt realise C meant to sell the sugar straight away it was reasonable to suppose that D meant to sell as soon as arrived

Question 24

Loss of bargain principle (How much can be awarded for the losses)

Answer 24

-Court grants sum of money which will put C in same position as if contract had been properly performed
-eg agreed to buy car for $2000, seller changes mind and breaches contract. Look for similar car and only find similar for $2500. Entitled to $500 damages
-eg agree to buy car for $2000 but buyer changes mind and breaches. Seller tries to sell to someone else but can only get $1800. Entitled to $200 damages.

Question 25

Case for loss of bargain principle

Answer 25

Charter v Sullivan
-D contracted to buy hillman minx car then refused to take delivery. Bc demand for car greater than supply, seller could easily sell car and make profit, only nominal damages awarded.
-Where there is a market the damages will be diff between contract price and price in the market, if profit remains then no loss

Question 26

Is C has suffered no loss of profit will any damages be awarded?

Answer 26

-Only nominal damages

Question 27

What is the reliance loss principle?

Answer 27

-Alternative to damages for expectation loss where these are too difficult to calculate
-c can recover any money they spent because they had relied on the contract being performed.

Question 28

Case for reliance loss principle

Answer 28

-Anglia TV v Reed
-Reliance loss damages awarded for money spent by tv company in preparing for the film when the dft pulled out and a suitable replacement could not be found

Question 29

Mitigation of loss

Answer 29

-Damages reduced if C failed to mitigate the loss
-When D breaches contract C must not do anything which makes loss more. Eg if D failed to buy goods C should try and sell to someone else even lower pice so C’s loss will not be so great

Question 30

Case for Mitigation of Loss?

Answer 30

-Thai Airways v KI Holdings
-D’s didnt deliver new aircraft seats to C as agreed so C couldn’t use the aircraft. Airline mitigated loss by leasing substitute planes and they were more fuel efficient - had to be taken into account and damages reduced by the amount fuel sales so overall effect no loss and no profit

Question 31

Liquidated damages (difference from penalty clauses)

Answer 31

-Amount of damages stated in a term of contract
- Parties have agreed how much compensation will have to be paid by the other party if contract breached
-If contract breached, court order d to pay amount of damages in contract
-Court wont do this if see term as a penalty clause (excessive sum)

Question 32

Test for whether a term is liquidated damages or a penalty clause
-2 cases

Answer 32

-changed recently
-new rules in Cavendish Sqaure holdings v Talal El Makdessi and Parking Eye v Beavis

Question 33

What do the cases state that the term which sets out an amount to be paid if contract is breached must…

Answer 33

-Be to protect a legit interest
-Not be exorbitant or uncosciousable
However
-D doesn’t have to show they actually suffered loss
-Amount in term does not have to be genuine pre estimate of amount of loss
-Purpose of amount can be to determine specific breach

Question 34

What is the aim and the effect of liquidated damages new rules?

Answer 34

-Aim to protect freedom of contract
-Effect is courts are less likely to see terms as penalty clauses in future and more likely to reward the amount specified.