Remedies

Question 1

Remedies in CL

Answer 1

• damages (compensation)
• recission (equitable remedy)
• specific performance (equitable remedy)

Question 2

purpose of damages

Answer 2

compensate the claimant for the losses suffered as a result of the breach.

put the victim in the position they would have been in if the contract had been properly completed and performed by D.

Question 3

compensatory damages requirements

Answer 3

1) causation in fact
2) remoteness of damage

Question 4

1) causation in fact

Answer 4

‘BUT FOR’ the breach of contract would the C have suffered the loss?

If loss arises partly from the breach and partly as a result of intervening events, the party in breach still liable if chain of causation is not broken.

Question 5

2) remoteness of damage

Answer 5

test of remoteness: Hadley v Baxendale:

1) objective - based on what loss is a natural consequence of the breach (** Victoria Laundry v Newman Industries**)
2) subjective - based on the specific knowledge of potential losses in minds of both parties when contact is formed

Lord Asquith LJ remoteness:
1) Recoverable loss should be reasonably foreseeable
2) Foreseeability of loss depends on knowledge at time contract formed (H Parsons v Uttely Ingham)
3) Knowledge can be implied on basis of what a reasonable man may have contemplated in the circumstances (The Heron II)

Question 6

quantifying damages: categories of recoverable loss

Answer 6

1) loss of bargain
2) reliance loss
3) non-pecuniary loss
4) loss of amenity (loss of benefit)
5) mitigation of loss
6) liquidated (fixed) damages

Question 7

1) loss of bargain

Answer 7

aim to place C in financial position as if the contract had been properly performed (Bence Graphics v Fasson)

failure to deliver the goods or services and alternative supply has to be found, OR failure to accept delivery and an alternative market has to be found
-> if Cs ability to make a profit remains, NO damages (Charter v Sullivan)
-> if no available market, C can recover the full loss (W L Thompson v Robinson Gunmakers)

Loss of profit -> recover for profit he would have been able to complete but for the breach of contract (Victoria Laundry v Newman Industries)

Loss of a chance -> speculative loss not recoverable
- exception: lost opportunity has a real, quantifiable value (Chaplin v Hicks)

Question 8

2) reliance loss

Answer 8

C can recover for expenses had to spend in advance of a contract that has been breached (Anglia Television v Reed)

Question 9

3) non-pecuniary loss

Answer 9

generally no compensation for V suffer upset/distress caused by breach (Addis v Gramophone)

exception: contract is based on pleasure, relaxation and peace of mind (Jarvis v Swan Tours)

Question 10

4) loss of amenity (loss of benefit)

Answer 10

V suffered breach but the expectation loss (loss of bargain) basis of assessment will produce and unfair or absurd result.
(Ruxley Electronics v Forsyth)

Question 11

5) mitigation of loss

Answer 11

Once breach occurred, C is not entitled to sit back and allow the losses to increase.

Obligation on C to take reasonable steps to mitigate (reduce) the losses.

BUT no duty to mitigate for anticipatory breach

(White & Carter v McGregor)

Question 12

6) liquidated (fixed) damaged

Answer 12

parties may fix in contract what the amount of damages will be if there is a breach, court will enforce that agreement

ONLy accept if the sum identified is an accurate & proper assessment of loss.

If not, seen as a penalty & not enforceable

Cavendish Square Holding

Question 13

equitable remedies

Answer 13

equitable remedies may be awarded by the court where damages alone would not prove an adequate remedy and justice would not be served.

at the discretion of the court

1) recission
2) specific performance

Question 14

recission

Answer 14

found mainly in cases of misrepresentation.

parties are placed in the position before the contract was made

if not possible then rescission not granted.

rescission only be awarded fair, and damages are not appropriate

Question 15

specific performance

Answer 15

court may order party who is in breach to complete their side of the contract.

very rare, only awarded when subject matter of the contract is unique and an award of damages would be inadequate

e.g. a contract for the sale of land or a Picasso painting

NOT awarded if:
• damages are an adequate remedy
• supervision of the contract would be required
• contract involves the provision of personal services

SP must available to both parties for it to be awarded to either party

Party claiming SP must have acted equitably (fairly) before and during the contract.