lesson 7

Question 1

What are the main legal remedies for breach of contract?

Answer 1

Damages, termination, rescission & restitution, specific performance, injunctive relief, and price adjustment.

Question 2

What is the general structure of liability under common law?

Answer 2

Contractual obligation → breach → strict liability (no fault required) → damage.

Question 3

How does civil law approach contractual liability?

Answer 3

Requires: contractual obligation, fault, causality, and damage. Liability is not strict and varies by jurisdiction.
Prerequisites for liability
– Valid contract
– Breach of obligation
– Damage
– Causal link between the breach and the damage

Question 4

What is the concept of ‘causality’ in damage assessment?

Answer 4

There must be a causal link between the breach and the damage (conditio sine qua non), and the damage must be foreseeable.

Question 5

What are ‘expectation damages’?

Answer 5

Compensation that puts the injured party in the position they would have been in had the contract been properly performed.

Question 6

What are ‘reliance damages’?

Answer 6

Compensation that returns the injured party to the position they were in before the contract — covers wasted costs and efforts.

Question 7

What is a ‘liquidated damages’ clause?

Answer 7

A contractual provision specifying a fixed amount of damages to be paid in case of breach — avoids litigation over damage amount.

Question 8

What is the difference between termination and rescission?

Answer 8

• Termination ends the contract due to breach but maintains past obligations.
• Rescission voids the contract as if it never existed (retroactive effect).

Question 9

What is the relevance of the Hadley v. Baxendale case?

Answer 9

It established the foreseeability principle in English law: only damages that were foreseeable at the time of contracting are recoverable.

Question 10

What is the main basis of liability in contract law

Answer 10

In common law, liability mostly comes from breach of contract, even without fault.

In civil law, liability usually requires fault and causality.

Question 11

What is a limitation of liability clause?

Answer 11

A contract clause that limits how much a party must pay in damages.
- Caps on damages

• Exclusion of indirect losses
• Time limits for claims