Remedies Flashcards
(30 cards)
What is the aim of a remedy in contract law?
To compensate the claimant and put them in the position they would have been in had the contract been performed.
What are the primary types of remedy available for breach of contract?
Damages (primary remedy)
Specific performance
Injunction
Restitutionary damages
Statutory remedies
What is the expectation interest?
The measure of damages that puts the claimant in the position they would have been in had the contract been performed
What are three ways of calculating expectation damages?
Cost of cure
Diminution in value
Loss of amenity
What is the reliance interest?
Damages putting the claimant in the position as if they had not contracted, allowing recovery for wasted expenditure
Can reliance damages be recovered if the claimant would not have recouped their expenses anyway?
No. The reliance interest only applies to wasted expenditure
Are damages for mental distress generally recoverable?
No, unless the whole or main purpose of the contract was pleasure or peace of mind.
Are damages for loss of reputation recoverable?
Rarely. One exception is where loss of reputation affected employment prospects.
Are damages for loss of a chance recoverable?
Yes, if there is a real and substantial chance, and it can be quantified
What is factual causation in contract?
A common-sense link between breach and loss
What is legal causation?
A test for whether the defendant should legally be held responsible. The chain of causation may be broken by a novus actus interveniens
What is the Remoteness rule from Hadley v Baxendale?
Recoverable losses must either:
(1) arise naturally from the breach, or
(2) be in the reasonable contemplation of both parties at the time of contracting.
What is the rule on mitigation of loss?
A claimant must take reasonable steps to minimise their loss
What happens if the claimant fails to mitigate?
They cannot recover avoidable losses.
What is restitutionary damages?
Damages based on the gain made by the defendant
When will restitution be awarded for breach?
Only in exceptional circumstances, such as where the claimant has a legitimate interest in preventing profit from breach and no adequate remedy exists.
What is total failure of consideration?
A situation where one party receives nothing in return for performance, allowing recovery on the basis of unjust enrichment.
What is a liquidated damages clause?
A clause stipulating a fixed sum payable for a specific breach.
What is a penalty clause?
A clause which imposes a disproportionate detriment and is therefore unenforceable.
What is the test for penalty clauses from Makdessi?
Is the clause a primary or secondary obligation?
If secondary:
a. Does it protect a legitimate interest?
b. Is the detriment out of proportion to that interest?
What is specific performance?
A court order requiring a party to perform a positive obligation under the contract.
When is specific performance available?
Only where damages are inadequate, and the contract involves unique goods or land.
What is a prohibitory injunction?
A court order preventing a party from breaching a negative obligation.
What principles govern these equitable remedies?
Must come with clean hands
Must act promptly
Must not require constant supervision
Must not cause undue hardship
