remedies

• The idea of an award of damages is to provide compensation so far as money can do it for loss the claimant suffers as a result of a breach of contract. It is not generally to punish the defendant, nor to recoup from them any benefit they have obtained from breaching the contract.
• Nominal damages


  A small sum (often £10) awarded to recognise that a contract has been broken, even if the claimant has not suffered any loss
• Substantial damages


  Damages intended to compensate the claimant for loss suffered
• The loss for which compensation is being claimed must have been caused by the particular breach of contract
• Expectation loss/loss of bargain

  The claimant's position after the breach compared to where they would have been if the contract had been properly performed
• Reliance loss


  Expenses incurred by the claimant because of reliance on the contract being performed, where the profits they hoped would materialise are too speculative
• Expectation loss


  • Ayesha sells a Ming vase to Barbara for £50,000, but it turns out to be a copy worth £1,000. Damages of £59,000.
  • Carol agrees to buy goods from David at £1,000, but David refuses to deliver. Damages of £200.
  • Fields plc tries to deliver goods to Esher & Co at £8,000, but Esher & Co refuses to accept. Damages of £5,500.
• Reliance loss


  • Jason agrees to cut down a tree for Carol for £250, but she cancels the contract. Damages of £220 for his lost profit.
• Pecuniary losses


  Losses that can be readily translated into financial terms, such as lost profit or property damage
• Non-pecuniary losses


  Losses that cannot be readily assessed in financial terms, such as physical inconvenience or mental distress
• Non-pecuniary losses are comparatively unusual in contract, and can only be claimed in limited circumstances such as breach of holiday or wedding contracts
• Non-pecuniary losses


  • Jarvis v Swans Tours - Damages of £125 awarded for loss of enjoyment of a holiday that failed to match the description in the brochure.
• Remoteness of loss


  Whether a particular type of loss would have been in the reasonable contemplation of the parties at the time of the contract as being a likely consequence of the breach
• If a certain loss would be an inevitable or natural consequence of breach, the parties will be deemed to have had it in their reasonable contemplation. For any other type of loss, it depends on what the defendant actually knew at the time of the contract.
• Remoteness of loss


  • Parsons (Livestock) Ltd v Uttley Ingham - Illness and death of pigs from mouldy feed was not too remote, as it would have been within the reasonable contemplation of the parties.
• Mitigation of loss


  The claimant has to take reasonable steps to reduce the amount of loss caused by the breach
• Mitigation of loss


  • Sheila should look for alternative employment after being dismissed.
  • Nasser should try to buy similar goods elsewhere after Ellery's refusal to deliver.
  • Arjuna should try to sell the goods elsewhere after Pauline's refusal to accept delivery.
  • Elnora should get quotes to finish the painting work after Hugh abandoned the job.
• Situation


  • Mitigation
• Sheila is dismissed from her job as a dental assistant in breach of contract


  • Sheila should look for suitable alternative employment as a dental assistant
• In breach of contract, Ellery refuses to deliver goods to Nasser


  • Nasser should go into the marketplace straight away and try to buy similar goods elsewhere
• Arjuna tries to deliver goods to Pauline, but in breach of contract Pauline refuses to accept delivery


  • Arjuna should go into the marketplace straight away and try to sell the goods elsewhere
• Hugh agrees to paint all the rooms in Elnora's house. He paints the kitchen, but then abandons the job because he can earn more money elsewhere


  • Elnora should look for someone else to finish the painting at a reasonable price. She should obtain two or three comparable quotations and accept the cheapest
• Claimants will not be allowed to claim for any part of the damage that was due to their failure to take reasonable steps to mitigate their loss
• The burden of showing that the claimant has failed to mitigate their loss is placed upon the defendant and the defendant may find this difficult
• A claimant who has acted reasonably can claim for their loss, even if their reasonable attempts to mitigate have failed to reduce their loss, or even increased it
• What steps count as reasonable is a question of fact for the court to decide
• Quantification of damages


  Measuring the loss in financial terms
• The normal measure of loss is the cost of putting it right - the cost of reinstatement, or so-called 'cost of cure'
• With defective goods, the starting point for the law is the difference in value between the goods (as they are) and the goods as they were expected to be
• Ruxley Electronics v Forsyth [1996] AC 344


  • Mr Forsyth stipulated the deep end of the pool should be 7 feet 6 inches deep, but it was only 6 feet 9 inches deep
  • There was no difference in value, but it was going to cost £21,560 to rectify the problem
  • The House of Lords awarded Mr Forsyth £2,500 as representing the true loss suffered, namely the loss of amenity/consumer surplus
• Cost of cure is the normal measure in cases of defective work, but the House of Lords did not consider it should be used where it was unreasonable in relation to the benefit to be obtained
• Specified damages clauses are enforceable and the specified amount is what the claimant will be awarded whatever their actual loss
• Penalty clauses are unenforceable and damages will be assessed in the usual way
• Specified (or liquidated) damages clause

  A genuine attempt to pre-estimate the loss that is likely to be caused by the breach
• Penalty clause


  An attempt to put pressure on a party to perform the contract because the sum stipulated is extravagant or otherwise disproportionately high
• The real test of a penalty clause is whether the means by which the contracting party's conduct is to be influenced are unconscionable or extravagant
• ParkingEye Ltd v Beavis


  • ParkingEye had a legitimate interest in receiving income to meet the legitimate costs of running the car parking scheme, so the £85 fee for overstaying was not a penalty
• The rules on types of loss recoverable, remoteness of damage, mitigation of loss and specified damages all work to limit the amount of damages awarded