remedies

• approach for compensatory damages

  1. has the claimant suffered a loss
  2. has the claimant suffered an actionable type of loss
  3. causation: did the breach cause the claimant's loss
  4. remoteness: was the type of loss too remote
  5. mitigation: has the clamant mitigated the loss
  6. did the claimants fault contribute to the loss
• remedies

  • Where a litigant seeks a remedy, they will almost invariably be asking the court to disturb an existing status quo
  • usually ordered by one party to pay the other money
• remedies for breach of contract

  •Damages- monetary compensation for loss cause by breach – the main focus of these lectures   

  •Action for agreed sum (or action for the price)  

  •Specific Performance
• specific performance

  • order which the court gives for the terms of the contract to be performed
  • common for contracts concerning land
  • given at the courts discretion
• the expectation loss principle

  damages for breach of contract should put the claimant in the position they would have been in if the contract had been performed
• What is the purpose of remedies in contract law?

  To enforce the contract by seeking an order from a court.
• What is the most common type of civil claim in the County Court?

  Simple debt collections.
• What does the law of contract specify regarding remedies?

  It sets out the circumstances under which remedies are available.
• Under what condition is a contract claim litigated?

  When no other resolution is possible and the claimant can summon resources.
• What must be established for remedies in contract law?


  1. A contract exists between the parties.
  2. No operative vitiating factors (e.g., duress, misrepresentation).
  3. A term of the contract has been breached.
  4. A remedy is available for the breach.
• What does a litigant seek when asking for a remedy?


  To disturb an existing status, usually asking for payment.
• What are the main remedies for breach of contract (BoC)?

  1. Damages – monetary compensation for loss caused by breach.
  2. Action for agreed sum.
  3. Specific performance.
• What is the action for agreed sum in contract law?


  It is brought when there is a breach of not paying an agreed sum of money.
• How does specific performance differ from monetary obligations?


  Specific performance does not normally apply to money obligations.
• What is the expectation loss principle in damages?


  It aims to put the claimant in the position they would have been in if the contract had been performed.
• What was the outcome of Ruxley Electronics v Forsyth regarding damages?


  The House of Lords restored a £2,500 award for loss of amenity.
• What are the important qualifications regarding the expectation loss principle?


  1. Mitigation – losses that reasonable steps could have avoided cannot be claimed.
  2. Remoteness – losses that are too remote cannot be claimed.
  3. Non-pecuniary loss – when can damages be claimed?
  4. Pre-contractual position – can damages be based on lost expenditure?
  5. Benefit to the defendant – can damages be based on the benefit obtained from the breach?
• What is the principle of mitigation in contract law?


  The claimant must take reasonable steps to minimize their losses after a breach.
• What was the case example illustrating mitigation in Payzu v Saunders?

  The buyer claimed extra costs after the seller repudiated the contract.
• What was the outcome of Payzu v Saunders regarding the seller's liability?


  The seller was not liable as the buyer should have mitigated loss.
• In British Westinghouse v Underground Electric Railways, what did UER do to mitigate their loss?


  UER obtained replacement turbines from another manufacturer.
• What was the ruling in Globalia Business Travel v Fulton Shipping regarding the benefit caused by the breach?


  The Supreme Court held that the benefit should not be taken into account for damages.
• What is the summary of the effect of the mitigation principle?


  • Claimant cannot claim for losses which reasonable steps would have avoided.
  • Claimant can claim reasonable costs incurred in mitigation.
  • Encourages minimizing overall costs of breach.
  • Requires consideration of the defendant's interests.
• What was the case of Radford v DeFroberville about?

  It involved a claim for the cost of building a boundary wall.
• What was the test for claiming the cost of building the wall in Radford v DeFroberville?


  The test was whether the cost was reasonable as well as intent.
• How can the principles of remedies be applied across different contracts?


  • The underlying rules can be applied to various types of contracts.
  • Consistency in legal principles across different cases.
  • Adaptation of principles to specific contract contexts.
• what is damages

  •The idea of compensation -  based on claimant’s loss

  General principle:  damages for breach of contract should put the claimant in the position they would have been in if the contract had been performed - the expectation loss principle
• claim for compensatory damages

  1. Has the claimant suffered a loss
  2. Was the loss an actionable loss
  3. Causation: Did the breach cause the claimant's loss
  4. remoteness: was the loss to remote
  5. mitigation: did the claimant mitigate the loss
  6. did the claimants fault contribute to the loss
• Ruxley electronics v Forsyth facts

  •Contract  to build swimming pool for £18k (2024 = £47k*)

  •Pool not as quite as deep as specified (about a foot or 0.3m), but still perfectly OK for diving

  •Only means of getting right depth was to reconstruct it at cost of £22k.

  •Value of house not affected
• mitigation case

  Payzu v Saunders 1919
• Payzu v Saunders 1919

  •contract for deliveries of silk, on credit terms

  •Seller repudiated contract because she thought (wrongly) buyer could not pay- would only supply for cash; this was a breach of contract by the seller

  • Buyer bought elsewhere and claimed extra cost

  •CA: D (seller) not liable: buyer should have mitigated loss by recontracting with original seller on cash terms

  •This means that many breaches of contract will not be regarded as causing any loss!
• British Westinghouse v Underground Electric Railways (1912)

  • Westinghouse supplied turbines to UER  to generate electricity for the London Underground; these proved more costly to run than specified in the contract.

  •To mitigate their loss, UER obtained replacement turbines from another manufacturer; these were not only more efficient (ie less costly) than the old turbines actually were, but also more efficient than the old turbines would have been if they complied with the contract specification.

  •This meant UER were better off, over the expected life of the old turbines, than  if  there had been no breach of contract.

  •HL held that these benefits should taken into account to reduce the claim as they were caused by the breach  
• Globalia business travel v Fulton shipping 2017

  –D terminated charter of cruise ship two years early in breach of contract

  –Normally, D would have been liable to the owner for any lost profit over the remaining two years

  –But, C could not rehire ship, and so sold the ship for $23m

  –However, if there had been no breach and C had kept  ship on hire for two more years, the ship’s value  would have plummeted due to the financial crash of 2008- it could only have  been sold for $7m

  –D claimed this benefit to C had to be taken into account for damages claim. 

  •SC held: should  not to be taken into account – the benefit had not been caused by the breach or acts of mitigation- capital disposal was seen as an independent act           
• mitigation principle

  • C can't claim for losses which reasonable steps would have avoided
  • C can claim for reasonable costs incurred when attempting to mitigate - even if unsuccessful as long as it is reasonable
• what is rationale

  •Avoids overall waste of resources by creating incentives to minimise overall cost of breach

  •Requires C to take due account of D’s interests as well as his own  (some say this is based on the idea of good faith, of which more later in the term)
• Ruxley v Forsyth ruling

  the cost was disproportionate to the benefit which would be obtained

  •CC- judge awarded £2,500 for loss of amenity

  •CA – court allowed claim for £22k cost  of replacing pool 

  •HL - could not claim the cost of replacing pool
• Tito v Waddell 197

  phosphate mining on Ocean Island/Banaba from c 1900 - 1980

  Ds (mining company) agreed to reinstate, but did not

  Cost of reinstatement – $75,000 per acre

  Difference in value - $75 per acre

  The Banabans were unsuccessful in their claim. The agreements imposed governmental obligations upon the Crown which were unenforceable by the courts. The order for specific performance was not granted because the relevant landowners did not appear before the court.
• expectation loss principle

  damages for breach of contract should put the claimant in the position they would have been in if the contract has been performed
• Hadley Principle 2

  1. D Liable for all ordinary losses ie those  anyone entering contract could foresee without special knowledge
  2. D only liable for non- ordinary losses if they had knowledge of the circumstances when entering the contract
• Hadley Principle 1

  Damages for breach of contract should be those that may fairly and reasonably be considered as arising naturally — that is, in the usual course of events — from the breach itself.