Remedies

• Remedies are available to parties where there has been a breach of contract resulting in loss. The court will consider what the result of the breach is when deciding what remedies to award. Remedies can consist of compensatory damages, equitable remedies or statutory remedies under the Consumer Rights Act 2015.
• The main form of legal remedy is a monetary compensation in the form of damages. The aim of damages is to put the harmed party back in the position they would have been if contract had been completed (ie what should have happened?)
• Compensatory damages look to provide compensation for the actual loss which has occurred as a result of the breach of a contract that was never completed. The court will attempt to estimate what profits would have been made by C and award the same as damages.
• To do this, they will consider: 1. Loss of bargain, covering how they could put C in the same position they would have been in if they had not been provided inferior goods. The difference in value between the goods or services required and those provided will be given (Bence Graphics International), whether there is a market for refused goods (Charter v Sullivan), if they have lost profit the C can recover for the profit they would have been able to make (Victoria Laundry) and any loss of chance (eg missing out on a job) (Chaplin v Hicks); 2. Reliance loss for incurred expenses from relying on the contract (Anglia Television Ltd or for loss of amenity (Farley v Skinner); 3. Restitution for money or benefits paid in advance (Clarke v Dickson).
• Special situations must be considered as damages can’t usually be claimed for mental distress in a commercial contract (Addis v Gramophone Co Ltd), although they can if the main point of the contract is pleasure (Jackson v Horizon Holidays).
• Losses must have arisen naturally or been within the contemplation of the parties (foreseeable) and must not be too remote from the breach. Hadley v Baxendale established the rules on remoteness, if either is proved then the D is liable; firstly there is the objective test which considers what loss is the natural/direct consequence of the breach. This is proven via the ‘but for’ test - would the loss have happened ‘but for’ the breach. If not, then the objective test is established. Secondly; did the parties have knowledge of the potential losses/breach when the contract was made. If there was no knowledge, there will be no damages. Knowledge can include implied knowledge and need only be reasonable (Victoria Laundry v Newman), and whether the reasonable person would have damage in mind (The Heron II).
• Claimants are also under a duty to mitigate their losses. This means that they must do what they can to ensure that they reduce losses where possible and only claim for what is reasonable in the circumstances. If they do not, their damages may be reduced (Pilkington v Wood).
• Liquidated damages must also be considered. This is where the damages amount is set by the parties when the contract is originally formed. This was originally set out in Dunlop Tyres v New Garage and Motor Co. and later updated in Cavendish Square Holding v BV v Talal El Makdessi and Parking Eye Ltd v Beavis to explain that it must protect a legitimate interest and must not be exorbitant/unconscionable/excessive.
• Alternatively, there are equitable remedies. These are awarded where damages is an inadequate remedy and justice would not be served merely by damages. They include: Specific performance and injunctions.
• Specific performance is when there is a court order to COMPLETE the contractual obligation (Airport Industrial G P Ltd v Heathrow Airport). This could involve circumstances where the is a contract for for unique goods, when damages would be nominal (AB v CD). Specific performance won’t be awarded when; there is monitoring of an ongoing obligation (Ryan v Mutual Tontine), where it would cause hardship (Patel v Ali) or when the contract was obtained unfairly (Walters v Morgan).
• Prohibitory injunctions can be granted which is a court order to STOP someone breaching the contract (Irani v Southampton AHA). Alternatively, a mandatory injunction could be granted which is a court order for a party to DO something. Either type of injunction can be permanent or temporary (interim injunction). However, they will not be awarded where it would be unfair to the defendant (Shell v Lostock Garage) or where the effect would be to give specific performance where it would not normally be granted (Page One Records v Britton).
• Remedies are also available under the Consumer Rights Act 2015 for sale of goods. s20 is the short-term right to reject. This right can be exercised up to 30 days after purchase (less for perishable goods eg fresh flowers) and allows a consumer to reject goods and get a full refund (within 14 days of return) with the trader covering the reasonable costs of return. The refund should be in the same way as payment was made.
• S23 gives a right to repair or replacement within a reasonable time. ‘Reasonable time’ has no definition but should be within six months. The Trader should have at least one opportunity to fix the goods but not if it is impracticable or impossible to repair or replace the item.
• S24 gives a right to have a price reduction or a final right to reject the goods if the trader does not complete the repair or does not complete it to a satisfactory standard. Any refund to the consumer may be reduced by a deduction for use, but not if the final right to reject is within 6 months of purchase.