remedies

• Compensatory damages


  The purpose of damages is to put the victim in the position they would have been in if the contract had been properly completed and performed by the defendant.

  
  

  To be able to award compensatory damages, the claimant must prove that the breach caused the loss, not just provided the opportunity for the loss.
• Monarch Steamship


  Factual causation in compensatory damages

  
  

  'But for' test

  
  

  If the loss would have happened regardless of the breach, then the breach could not be said to have caused the loss.
• Hadley v Baxendale


  Legal causation in compensatory damages

  
  

  Remoteness of the damage caused by the breach
• The Heron II


  Legal causation in compensatory damages

  
  

  The knowledge of the parties can be implied on the basis of what a reasonable man may have contemplated in the circumstances.
• Loss of a bargain (compensatory damages)


  This tries to place the claimant in the same financial position as if the contract had been properly performed.

  
  

  Bence Graphics International: Damages can be awarded by calculating the difference in value between the goods/services required and those provided.

  
  

  Charter v Sullivan: Damages can be awarded by calculating the difference between the contract price and the price in the market. If C is in profit, there is no loss.

  
  

  Damages can be awarded by calculating the loss of profit not just for goods but also in other contracts.

  
  

  Damages can be awarded by alculating what the loss of a chance is, although this is typically classed as 'speculative' damage and not usually recoverable.
• Reliance loss (compensatory damages)


  Expense incurred by a claimant who relied on a contract being performed

  
  

  Anglia Television v Reed: C may be able to recover expenses spent in advance of the contract that had been breached.

  
  

  Farley v Skinner: C may be able to recover damages for the loss of amenity.
• Expectation loss (compensatory damages)


  The usual measure of damages for a breach of contract

  
  

  Includes the profits that the party would have expected to recieve had the contract been performed, whilst taking into account the costs the party would've incurred to earn that profit

  
  

  Puts the innocent party in the same position as if the contract had been performed
• Restitution (compensatory damages)


  Repayment of any money, or other benefits passed to the defendant in advance of the contract that is breached
• Duty to mitigate the loss (compensatory damages)

  British Westinghouse Electric: The injured party must take reasonable steps to minimise the effects of the breach.

  
  

  Hochester v de la Tour: In an anticipatory breach, the innocent party is not bound to sue immediately when they know there is a possibility of a breach. They can choose to wait until the breach is an actual breach.
• Liquidated damages (compensatory damages)


  ParkingEye v Beavis: The amount of damages has been fixed by a term in the contract.

  
  

  Quantum Meruit: The Courts will award damages based on as much as the contract is worth.
• Other types of compensatory damages

  Nominal Damages: Where there is no loss actually suffered, but there is a breach of contract, the Courts may award 'nominal damages' (Staniforth v Lyall (1830)).

  
  

  'Wrotham Park' Damages: Sometimes substantial damages (more than nominal damages) are awarded over nominal damages. These types of damages try to quantify the sum which might be reasonably negotiated between the parties for giving permission to the wrongdoer to act as they did (Wrotham Park Estate v Parkside Homes (1974)).

  
  

  Speculative Damages: These are damages that are granted in speculative situations (e.g. a loss of a chance of a benefit or mental distress or loss of amenity). The Courts should try to avoid granting these where possible (Addis v The Gramophone Company (1909)).
• Equitable remedies


  Equitable remedies are awarded where damages is an inadequate remedy and justice would not be served merely by damages.

  
  

  Not a right

  
  

  Not constrained by remoteness of damage or causation

  
  

  E.g. injunction
• Specific performance (equitable remedies)


  This is where the Courts order one party to perform their contractual obligation.

  
  

  Page One Records: Specific performance will not be available where damages would be an adequate remedy or contracts involving personal service and contracts of employment.
• Rescission (equitable remedies)

  Putting parties back into the positions they were in before the contract was made.

  
  

  Rescission is not available when:

  1. Restitution to the original pre-contract position is impossible (Clarke v Dickson (1858))

  2. The contract is affirmed, where the innocent party decides to carry on the contract despite the misrepresentation (Long v Lloyd (1958))

  3. Delay in bringing a claim to court (Leaf v International Galleries (1950))

  4. A third party has gained rights over the property (Lewis v Averay (1972))
• Termination of contract for breach

  At common law, a breach can result in the termination of the contract if the affected so chooses, where:

  1. There is a breach of condition, or a breach of an innominate term construed as a condition.

  2. One party refuses to perform their obligations under a contract at all or the substantial part of its obligations, including anticipatory breach.

  3. One party makes it impossible to perform a contract.
• Consumer Rights Act 2015 (termination of contract)


  Supply of goods

  
  

  S.20: Short term right to reject

  S.23: Right to repair or replacement

  S.24: Right to a price reduction or final right to reject

  
  

  Supply of services

  
  

  S.55: Right to require repeat performance

  S.56: Right to a price reduction
• Misrepresentation Act 1967 (termination of contract)


  S.2(2): Courts have the discretion to use rescission or damages.

  
  

  Rescission will typically be given before damages.

  
  

  Rescission cannot be used in the following situations:

  1. Restitution to the original pre-contract position is impossible

  2. The contract is affirmed, where the innocent party decides to carry on the contract despite the misrepresentation

  3. Delay in bringing the claim to court

  4. A third party has gained rights over the property
• Sale of Goods Act 1979 (termination of contract)

  A lien, which is a right to retain possession of the goods of the debtor until paid. This is an unpaid seller's lien.

  
  

  In case of the insolvency of the buyer, a right of stopping the goods in transit and regaining possession of the goods from a carrier

  
  

  A right of resale as limited by the Act