1 - common remedies

• • damages are available by right when there is a breach of contract
• specific performance is where the court orders someone to do what they promised to do in the contract, it is not available by rights
• the primary obligation is a non legal statement made by the parties that shows an agreement for an economic exchange
• the secondary obligation is a legally enforceable contract, if this is breached there must be a remedy
• if you enter a contract to sell £1million of steel and it costs £900,000 to buy the steel, you expect a profit of £100,000 (expectation interest), if buyer rejects the steel after the contract been signed but you haven't bought the steel yet, you are owed £100,000. if you paid the £900,000 for steel, you can be owed £1million (reliance interest)
• damages = expectation + reliance
• when a party sustains a loss by a reason of breach of contract, he is to be placed in the position he would have been in had the contract been performed (expectation interest)
• Robinson v Harmon

  • 21 year lease, H thought he owned the property (he didnt - it was vested in trustees) so he leased out the building to R. When R comes to take possession of the house, H refused to complete the lease as he found out the property was worth more than he was leasing it out for. R paid £20 in the preparation of the lease and lost out on profit because of the breach. H paid £25 to court and claimed there was no need for further damages. Held, R recovered damages for the loss of the bargain (other party placed in the position they would have been in had the contract been performed)
• losses

  A) fact

  B) law

  C) unavoidable

  D) avoidable

  E) mitigation

  
• • claimant must show the breach caused the loss (cause in fact) - these are certain losses and are recoverable
  • if claimant cannot prove in fact that the breach caused the losses, these losses are uncertain and unrecoverable
• • After proving in fact, the D is liable for the losses which they had in their reasonable contemplation at the time of the agreement (proximate losses - recoverable)
  • Remote losses are caused by D but outside of the reasonable contemplation at the time of agreement and are not recoverable
• • If the D could have reasonably avoided the losses then they must do so (mitigation)
  • Avoidable losses are not recoverable
  • Unavoidable losses are recoverable
• Haddeley and Baxendale

  • H operate flour mill in Greenwich, needs repairs, B took crankshaft to repair - mill not operational at this time (B unaware of this), delivered it back a week late, H claimed damages for lost profits in the week, B said unreasonable as he was not aware of the closure and thus the lost profits. Held B not liable for damages as he had not reasonably foreseen delays and H had not informed him of the crucialness of the crankshaft. (can only be liable for damages that were within D reasonable contemplation at the time of the agreement)
• First rule in compensatory damages - Robinson and Harmon - put the claimant in the position they would have been in had the contract been performed
• Second rule in compensatory damages - Campbells rule - put the claimant in the position they would have been in had the contract been performed but done so at the least cost to the defendant (mitigation)
• can breach contract without any liability if the market prices are the same as the original sales price - there is no loss