Remedies 1

Question 1

What is the purpose of an award of damages?

Answer 1

Purpose is to compensate the claimant for damage / loss / injury

Question 2

What are nominal damages?

Answer 2

Damages of a token amount to acknowledge a breach of contract

Question 3

What is expectation interest?

Answer 3

A measure of damages putting the innocent party in the same position post-breach that they should have been in had the contract been performed.

Question 4

What are the three mechanisms for calculating the expectation interest?

Answer 4

Cost of cure
Diminution in value
Loss of amenity

Question 5

What is the cost of cure

Answer 5

Cost of substitute or remedial work required to put the claimant in the position they would have been in had the contract been properly performed - but the claimant must act reasonably in relation to defective works.

Question 6

What is the diminution in value?

Answer 6

The difference in value between the performance received and that promised in the contract

Question 7

What is a loss of amenity calculation?

Answer 7

A reflection of the court’s growing willingness to accept that a consumer should have a remedy if the loss is non economic.

Impossible in a commercial setting

Question 8

What is the reliance measure of calculating damages?

Answer 8

Allows the claimant to recover expenses which have been incurred in preparing for, or in part performance of, the contract.

Question 9

How do you calculate expectation interest?

Answer 9

Expected profits vs actual profits

Question 10

When will courts look to reliance losses, not expectation damages?

Answer 10

If expectation damages are highly speculative.

Question 11

What specifically does reliance interest allow recovery of?

Answer 11

Wasted expenditure only - if you can use the item bought in preparation elsewhere, it is not wasted.

Only losses incurred prior to breach, not as a consequence of breach. Remedying defective performance is not a reliance loss.

Question 12

Name three types of loss with special rules:

Answer 12

Mental distress

Loss of reputation

Loss of chance

Question 13

What are the two categories of when damages can be awarded for mental distress?

Answer 13

Contracts with a whole purpose of provision of pleasure, relaxation and peace of mind

Non-pecuniary loss in a contract where a major objective was pleasure, relaxation and peace of mind.

Question 14

When can damages be awarded for loss of reputation?

Answer 14

If they affect employment prospects; contracts of employment contain an implied term of trust and confidence such that the employer must carry out work in an honest way.

Question 15

When is the loss of a chance / opportunity recoverable in damages?

Answer 15

If it is quantifiable in monetary terms and a real and substantial chance that the opportunity might have come to fruition.

Question 16

What is the court’s attitude to loss of chance?

Answer 16

Reluctant to treat loss as too speculative and awards damages even if it is not straightforward.

Question 17

How is loss of chance practically assessed?

Answer 17

Only if calculated as a percentage chance of obtaining a benefit of below 50%.

Claimant needs to show that their loss of chance falls below 50% and that it is real and substantial.

They will recover the proportion of chance proved.

Question 18

If chance of obtaining a benefit is 50% or larger what should you do?

Answer 18

You should seek to recover expectation loss, proving this on the balance of probabilities.

Question 19

What does the claimant need to establish show a causal link between the breach of D and the loss incurred?

Answer 19

Factual causation: did the breach cause the loss suffered by the claimant?

Legal causation: should the defendant be held responsible?

Question 20

How has factual causation been interpreted by the courts?

Answer 20

Is the breach a dominant or effective cause of the loss?

Question 21

How is legal causation interpreted by the courts?

Answer 21

Looks at whether there has been a NAI; - and if so considers whether it was ‘likely to happen’ - if so, it generally won’t break the chain of causation.

Question 22

What is the law on remoteness in contract law?

Answer 22

Losses are recoverable if either:

1) It is a type of loss ordinarily and naturally arising from the breach [this is based on the usual course of things]

OR

2) The particular defendant had sufficient actual knowledge of the particular and special circumstances to be aware of the risk of those losses.

Question 23

What must an injured party do when faced with a breach?

Answer 23

Ensure it mitigates its losses; losses attributable to a failure to mitigate are not legally recoverable.

This wouldn’t include extensive litigation but might include accepting performance offered by D under a new contract, even if this could be breach of the original contract

Question 24

Is there a duty to mitigate a claim for part payment of a debt?

Answer 24

No, because it is payable as a contractual right rather than as damages.

Question 25

What significant mitigating factor to reliance interest was established by C & P Haulage v Middleton?

Answer 25

It is only possible for the claimant to claim its reliance interest if the contract would have enabled it to recoup those expenses had it been properly performed.

Question 26

Where does the burden of proof lie for reliance interest damages?

Answer 26

The defendant must prove that the claimant would not have recouped the expenditure had the contract gone ahead

Question 27

What key principle underpins both expectation and reliance interest?

Answer 27

No award of damages can put the claimant in a better position than it would have been in had the contract been performed

Question 28

What is the restitution interest?

Answer 28

The interest a claimant has in the restoration to them of benefits which the defaulting party has acquired at their expense.

Question 29

When can restitution interest be claimed?

Answer 29

Exceptional circumstances call for an account of profits. No fixed rules - court must consider all the circumstances. Guide: does the claimant have a legitimate interest in preventing the defendant's profit making activity and hence depriving him of his profit? Other remedies must also be inadequate.

Question 30

What is an efficient breach?

Answer 30

Cynical and deliberate Breach enabled the defendant to enter into a more profitable contract elsewhere By doing so, original contract could not be performed.

Question 31

Can an efficient breach alone justify restitution?

Answer 31

No

Question 32

In what other situation might the court order restitution payments?

Answer 32

Where there has been a total lack of consideration - restitution used to reverse unjust enrichment.

Question 33

What is the Transfield approach to remoteness?

Answer 33

Idea of whether defendant had assumed responsibility for losses.

Question 34

How do courts tend to analyse remoteness?

Answer 34

Hadley v Baxendale approach.

Question 35

When should the Transfield approach be used?

Answer 35

In specific industries where it is clear that the Hadley approach would not reflect the expectation or intention reasonably given to the parties.

Question 36

When is a good considered non-conforming under the CRA?

Answer 36

If it does not meet the requirement in S9 - satisfactory quality, s - 10 fit for purpose or s11 correspond with description

Question 37

What three remedial options are available if a good is considered 'non-conforming'

Answer 37

Short term right to reject Right to repair / replacement Right to price reduction or the final right to reject.

Question 38

When is the short term right to reject available?

Answer 38

30 days from time ownership passes / delivery / goods installed

Question 39

When is the right to repair / replacement?

Answer 39

Available unless impossible / disproportionate

Question 40

When is the right to a price reduction / final right to reject available?

Answer 40

Both are not available Only available after one repair / replacement goods remain non conforming, or repair / replacement are disproportionate Or if trader has failed to do so in a significant time.

Question 41

What are the rules on the final right to reject?

Answer 41

If exercised within 6 months, there should be full refund with no deduction for use EXCEPT for motor vehicles or any other goods specified by statutory order.

Question 42

What remedies are available for contracts for digital content?

Answer 42

Right to repair / replacement Right to price reduction 6 months window

Question 43

What remedy is available if a trader has no right to supply digital content?

Answer 43

Full refund for all money paid for content within 14 days

Question 44

What remedy if content has damaged a device?

Answer 44

Repair / compensatory payment

Question 45

What remedies are available if services are non-conforming?

Answer 45

Right to repeat performance Right to a price reduction