Remedies

• Nominal Damages


  Money as a response to the breach
• Substantial Damages


  Money for losses suffered as a result of the breach
• Loss of bargain


  To fully compensate the innocent party with the amount they actually lost from the breach (Bence Graphics International v Fasson)
• Reliance loss


  to fully compensate the expenses incurred by the innocent party relying on the contract (Anglia TV LTD v Reed)
• Restitution


  restores the innocent party to the position that they were in, to stop the df being unjustly enriched
• Mitigation of loss


  Injured party must take reasonable steps to minimise the effects of the breach (Thai Airways v KI Holdings)
• Liquidated Damages


  A specified sum of the parties for damages, that represents an accurate and proper assessment of loss (Parking Eye v Beavis)
• Penalty


  If the damages stated in the contract are not an accurate and proper assessment of loss (unenforceable)
• Equitable remedies


  any form of relief where monetary damages would be an inadequate remedy
• Specific performance


  An equitable remedy requiring the breaching party to perform as promised under the contract (Airport Industrial Ltd v Heathrow Airport)
• Prohibitory Injunction


  A court order directing a person to refrain from doing something
• Mandatory Injunction


  an order compelling one to do an act
• Interim Injunction


  temporary injunction obtained before the actual trial (AB v CD)
• Hadley v Baxendale (1854) – Remoteness of Damage

  The rule restricts compensation unfairly, especially when claimants suffer unexpected but severe losses.
• Hadley v Baxendale (1854) – Remoteness of Damage

  The foreseeability test is too rigid, ignoring cases where losses were unforeseeable but still devastating.
• Hadley v Baxendale (1854) – Remoteness of Damage

  Fails to consider commercial realities, where losses may be indirect but still highly significant.
• The Achilleas (2008) – Assumption of Responsibility

  Creates legal uncertainty—judges apply the assumption of responsibility test inconsistently.
• The Achilleas (2008) – Assumption of Responsibility

  Allows defendants to escape liability for foreseeable damage if responsibility is not expressly assumed.
• The Achilleas (2008) – Assumption of Responsibility

  Makes contract law less predictable, which is problematic for businesses managing risk.
• Victoria Laundry v Newman (1949) – Lost Profits

  Unfairly limits damages when a business suffers real but unforeseeable financial loss.
• Victoria Laundry v Newman (1949) – Lost Profit

  Encourages excessive disclosure—businesses may feel pressured to reveal all potential losses in advance.
• Victoria Laundry v Newman (1949) – Lost Profits

  Ignores modern commercial practices, where losses often depend on fluctuating market conditions.
• Jarvis v Swan Tours (1973) – Non-Pecuniary Loss for Holidays

  • Inconsistent approach—a ruined holiday can be compensated, but emotional distress from job loss (Addis v Gramophone) cannot
• Jarvis v Swan Tours (1973) – Non-Pecuniary Loss for Holiday

  • Too restrictive—mental distress is often just as significant as physical or financial loss.
• Jarvis v Swan Tours (1973) – Non-Pecuniary Loss for Holiday

  • Fails to reflect consumer expectations, where peace of mind is a key factor in many transactions (e.g., financial services, housing).
• Farley v Skinner (2001) – Expanding "Peace of Mind" Claims

  Creates judicial inconsistency—courts struggle to decide how “important” peace of mind must be.
• Farley v Skinner (2001) – Expanding "Peace of Mind" Claims

  Expands liability unpredictably—businesses may face unexpected claims for distress.
• Farley v Skinner (2001) – Expanding "Peace of Mind" Claims

  Fails to set clear limits—what counts as “important” is subjective and varies between cases.
• Watts v Morrow (1991) – Physical vs. Emotional Inconvenience

  • Unfair distinction—physical inconvenience is compensated, but emotional distress is not, even when both cause suffering.
• Watts v Morrow (1991) – Physical vs. Emotional Inconvenience

  • Fails to recognize the psychological impact of breaches, particularly in personal or employment contracts.
• Watts v Morrow (1991) – Physical vs. Emotional Inconvenience

  • Outdated reasoning—modern contract law should reflect the increasing legal recognition of mental distress in other areas (e.g., tort law).
• The default remedy for breach of contract is compensatory damages, aiming to put the claimant in the position they would have been in had the contract been performed (Robinson v Harman). However, this principle suffers from three key limitations:

  • Remoteness Rules Restrict Recovery
  • Difficulty Proving Loss
  • Inadequate for Non-Pecuniary Interests
• Remoteness Rules Restrict Recovery: Under Hadley v Baxendale, losses must be "reasonably foreseeable" at the time of contracting. This often excludes consequential losses that are factually caused by the breach but deemed too speculative (Transfield Shipping v Mercator Shipping).
• Difficulty Proving Loss: Claims for lost profits frequently fail due to evidentiary hurdles (Chaplin v Hicks). The courts’ reluctance to award damages for "opportunity loss" leaves many claimants undercompensated.
• Inadequate for Non-Pecuniary Interests: Damages for distress or disappointment are rarely awarded (Addis v Gramophone Co), ignoring cases where contracts are valued for personal reasons (e.g., ruined weddings in Farley v Skinner).
• "Compensatory damages function as a blunt instrument – theoretically precise but practically incapable of addressing the full spectrum of contractual harm, particularly where losses are intangible or unforeseeable."
• Courts grant specific performance sparingly, typically where damages are "inadequate" (Co-operative Insurance v Argyll Stores). This creates inconsistency:

  • Land and Unique Goods: Automatically qualify (Behnke v Bede Shipping).
  • Personal Services: Almost never enforced (Page One Records v Britton), despite modern gig economy realities.
  • Discretionary Hurdles: Courts refuse orders requiring ongoing supervision (Ryan v Mutual Tontine), even where monetary compensation is meaningless (e.g., bespoke software contracts)."The judiciary’s restrictive approach to specific performance prioritizes administrative convenience over justice – a relic of 19th-century equity that ill-serves a service-based economy."
• While Wrotham Park damages (negotiating fee for hypothetical release) show promise, restitution remains underdeveloped:

  • No General Right to Profit-Stripping: Unlike torts, contract law rarely strips defendants of gains from breach (Attorney General v Blake).
  • Formalistic Bars: The "no loss" paradox (White Arrow v Lamey’s Distribution) prevents claims where breach caused no measurable loss but unjustly enriched the defendant.

  First-Class Link:"Restitution’s constrained role reflects contract law’s stubborn fixation on compensation over deterrence – a policy blind spot that enables profitable breaches."
• The right to terminate for repudiatory breach (Hongkong Fir v Kawasaki) coexists with surprisingly creditor-friendly rules:

  • Accrued Rights Survive Termination: A party in breach can still sue for work done (Hyundai v Papadopoulos).
  • Debt Claims Trump Damages: Creditors can bypass remoteness rules by framing claims as debts (White & Carter v McGregor).

  First-Class Link:"This asymmetrical regime – where termination rights favor claimants but debt rules favor defendants – exemplifies contract law’s incoherent patchwork of remedies."
• Three targeted changes could rebalance the system:

  1. Expand Specific Performance: Adopt a rebuttable presumption for service contracts exceeding one year.
  2. Introduce Disgorgement: Allow profit-stripping for deliberate breaches of relational contracts (Bates v Post Office logic).
  3. Legislate Consequential Damages: Reverse Transfield for B2B contracts with foreseeable dependencies.