Remedies

• What are the three main remedies for a breach of contract?

  1. Damages
  2. Action for agreed sum
  3. Specific performance
• What are specific remedies?

  where claimants would go to court to get the judge to order a remedy (actions for agreed sum & specific performance)
• What are the two elements for agreed sum?

  1. there is no need for the claimant to establish that they suffered a loss: the issue is whether any sum is owed to them under the contract
  2. there is no requirement for mitigation
• What is the L.P of Hoeing v Isaacs that helps reduce the harshness of the entire obligations rule?

  L.P: if the defendant aims to stop the sum from becoming due e.g by preventing the work from being completed, the claimant would be allowed to recover in respect of the value of work that they have done
• How can repudiation be used by the claimant to receive money owed to them?

  the claimant can still claim the sum due to them even if the defendant had ended the contract as with repudiation, the claimant can elect to keep the contract open & begin/carry on with the performance (an actual legal right to repudiation)
• What is the L.P of White & Carter Ltd v McGregor? (where C was able to recover the full price even when D wrote to C to pull out of their contract)

  L.P: despite the claimant’s performance being unwanted, it still does not prevent them from being able to claim the price as there is no mitigation factor
• What are the two limits established by White & Carter that can prevent C from entitlements to an agreed sum?

  1. Cooperation
  2. Legitimate interest
• What is the Cooperation qualification?

  If C needs the other party's cooperation to complete their obligations and the other party refuses to cooperate, C can only claim damages & not the agreed sum
• What would occur if the Cooperation qualification is identified?

  the claimant would not be able to claim for the agreed sum BUT would be able to claim for damages if the defendant did not allow them to complete/start the contractual performance
• How can legitimate interest restrict C's right to an agreed sum?

  where if it can be shown that a person who performed the contract had no legitimate interest, financial or otherwise, the claimant’s right to an agreed sum would be limited as they are not really benefiting from the performance
• How did the case of The Alaskan Trader provide a subtle shift to legitimate interest? (where C repaired a ship that was refused by D & kept the ship at anchor until the hire ran out)

  L.P: when considering legitimate interest, the wholly unreasonable test can be applied where C's claim to sums would be restricted if their actions were deemed to be unreasonable
• What is specific performance?

  An order by the court that the terms of a contract should be performed (does not normally apply to money obligations)
• What type of remedy is specific performance & what does that entail?

  an equitable remedy: means that SP is at the discretion of the court (is not normally available to claimants as of right compared to other remedies)
• What is the traditional test used to acquire specific performance?

  the claimant must show that the common law remedy of damages would be inadequate in order to obtain the equitable remedy of specific performance
• What is the L.P of Argyll Stores? (where HoL refused C's order for D to keep their supermarket store open in C's shopping centre)

  L.P: when deciding if the claimant can obtain the right of specific performance, the court can decide on numerous factors to determine if such an order would be appropriate/not too oppressive on the defendants e.g public interest & the financial income of the defendant
• What are the first 3 factors that can limit specific performance?

  1. If the granting of a specific performance would require constant supervision by the court (repeated applications to court)
  2. The contract in question is a contract involving a personal service (difficult & inappropriate to try & force unwilling parties into a personal relationship)
  3. The obligation in question is insufficiently precise
• What are the last three factors that can limit specific performance?

  4. The conduct of the claimant: a claimant ‘must come with clean hands’ (due to it being an equitable remedy)

  5. Severe hardships would be caused to the defendant by granting specific performance e.g financial hardships

  6. The claimant had delayed too long in seeking specific performance & delay would make it unjust in all the circumstances to award the remedy
• What is the L.P of Patel v Ali for specific performance? (where C's purchase of a house was refused as the person living there was disabled & extremely ill)

  L.P: held that severe hardship could operate as a bar even where the hardship was not caused by the claimant & had been suffered after the contract was entered into
• What are liquidated damages?

  when rather than saying that a particular sum is due in return for the other party performing the contract, the contract may state that a particular sum is payable if one party breaches the contract
• Why are liquidated damages useful?

  • if both parties can estimate in advance the loss that they will suffer as a result of a breach, they can save themselves money by avoiding having to go to court
  • states how much the parties would have to pay for breaching the contract
• What is the aim of damages? (expectation loss principle?

  should put the claimant in the position they would have been in if the contract had been performed
• What is the meaning of mitigation?

  
  

  • where C can’t claim for losses if reasonable steps could have been taken to minimise that loss
  • C can claim for reasonable costs incurred when attempting to mitigate - even if unsuccessful, as long as reasonable
• What is the L.P of Ruxley Electronic v Forsyth? (where C was no longer entitled to damages as ordering D to replace their pool was seen as disproportionate)

  L.P: C can’t claim for losses that are too remote/disproportionate to the benefit which would be obtained
• What is the main rationale behind mitigation?

  
  

  • Balance of interests: C must consider D's interests
  • Reasonable steps: C should take reasonable actions to reduce losses
  • Good faith: reflects good faith in contract law
• What is the L.P of British Westinghouse v Underground Electric Railways? (where Cs were unable to claim the cost for new turbines as the replacements supplied by another manufacturer were more efficient than Ds)

  L.P: if the injured party's losses are completely balanced out by newer, more efficient replacements, the benefits from these improvements will be used to reduce damages that they can claim
• What is the aim of the exception principle by Robinson v Harman?

  to put the claimant in the position that they would have been had the contract been performed
• What are the requirements for exception loss?

  it requires for the type of loss to be reasonably foreseeable, it lays down certain causation requirements & the claimant may be unable to recover if they did not take sufficient steps to minimise the loss they suffered
• What are the two methods to compensate loss? (exception)

  1. to award the difference between the value of the performance that was actually provided & the value of the performance that should have been provided (difference in value approach)
  2. awards the defendant the cost of ‘curing’ the breach: how much it would cost the claimant to get a third party to do what the defendant failed to do or to rectify the breaches caused by the defendant (cost of cure approach)
• What is the test in Ruxley used for cost of cure?

  an important factor in deciding whether it would be unreasonable is whether the cost of cure is ‘wholly disproportionate’ to the difference in value
• What is the reliance principle?

  to put the claimant back in the position they were in before the contract was made
• What is required for the reliance loss?

  need to determine how much money they have spent in preparing to perform and then performing the contract is now wasted due to the breach
• What is the L.P of Chaplin v Hinks?

  L.P: where even if all the claimant lost was the chance to obtain a benefit, the court would sometimes attempt to put a value on this, providing that the claimant can show that they have lost a real or substantial chance