Remedies

• Remedies


  What enforcing a contract actually means
• Virtually all the common law of contract has been developed in cases where one party is trying to enforce the contract by seeking an order from a court (i.e. a remedy)
• Vast majority of civil claims are simple debt collections in the County Court- the law provides enforcement machinery (e.g. an order entitling bailiffs to enter premises and sell goods)
• Basic things to establish for a contract claim

  • That a contract between the parties exists
  • There are no operative vitiating factors (e.g. duress, misrepresentation)
  • A term of the contract has been breached
  • A remedy is available for the breach
• Where a litigant seeks a remedy


  They will almost invariably be asking the court to disturb an existing status quo, usually by ordering one party to pay the other money
• Main Remedies for Breach of Contract

  • Damages- monetary compensation for loss caused by breach
  • Action for agreed sum (or action for the price)
  • Specific Performance
• Action for agreed sum


  This is the action brought where the breach is not paying an agreed sum of money. It is not the same as an action for damages, as it is not based on identifying and quantifying the claimant's loss - the only question is whether money has become due under the contract.
• Specific Performance


  An order of the court that the terms of the contract be performed. It does not normally apply to money obligations (these are covered by action for the price). SP is an equitable remedy, so it is at the discretion of the court, unlike actions for damages and agreed sum which are available to claimants as of right.
• Damages


  The idea of compensation - based on the claimant's loss. The general principle is that 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.
• A claimant can only claim more than nominal damages for breach of contract if they have suffered a loss as a result of the breach
• Ruxley Electronics v Forsyth


  • Contract to build swimming pool for £18k (2020=£35,450 RPI). Pool not as deep as specified, 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.
• Topics in Damages


  • Mitigation - C can't claim for losses that reasonable steps could have avoided
  • Can C claim cost of cure in all circumstances? (the Ruxley issue)
  • Remoteness- C can't claim for losses that are too remote a consequence of the breach
  • When can damages be claimed for non-pecuniary loss?
  • Can C ever opt to claim damages to put them in the pre-contractual position (e.g. lost expenditure rather than lost profit)?
  • Can damages for breach of contract ever be based on the benefit which the D obtains from the breach?
• Mitigation


  Where a claimant suffers a loss which is ongoing, they cannot just let the losses pile up - they are under a duty to take reasonable steps to minimise losses.
• Payzu v Saunders


  • Contract for deliveries of silk, on credit terms. Seller repudiated contract because she thought (wrongly) buyer could not pay - would only supply for cash. 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.
• British Westinghouse v Underground Electric Railways

  • 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 (i.e. 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. HL held that these benefits should be taken into account to reduce the claim as they were caused by the breach.
• Globalia Business Travel v Fulton Shipping


  • 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 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.
• The mitigation principle means that a claimant can't claim for losses which reasonable steps would have avoided, but they can claim for reasonable costs incurred when attempting to mitigate - even if unsuccessful, as long as reasonable. The rationale is to avoid overall waste of resources by creating incentives to minimise overall cost of breach, and requires the claimant to take due account of the defendant's interests as well as their own.
• Ruxley Electronics v Forsyth


  • Contract to build swimming pool for £18k (2020=£35,450 RPI). Pool was 7 feet 6 inches (2.28m) at deep end: 9-18 inches (c.0.3m) shallower than specified. Only means of getting right depth was to reconstruct it at cost of £22k. Value of house not affected. What loss has C suffered? How are damages assessed?
• Tito v Waddell


  • Phosphate mining on Ocean Island/Banaba from c 1900 - 1980. Ds agreed to reinstate, but did not. Cost of reinstatement - $75,000 per acre. Difference in value - $75 per acre. Test of Megarry VC - whether Cs intended to and would reinstate the land - here, Banabans had said they would not reinstate.
• Radford v DeFroberville


  • C sold adjoining land to D. D agreed to build boundary wall. D did not do so. C could claim cost of building wall - test was whether it was reasonable as well as intent.
• In Ruxley v Forsyth, the House of Lords held that the claimant could not claim the cost of replacing the pool, as the cost was disproportionate to the benefit which would be obtained. The principle to be applied was to ask whether the cost was disproportionate to the benefit.