Remedies in Contract
- Created by: cephillips
- Created on: 05-05-14 16:04
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- REMEDIES FOR BREACH OF CONTRACT
- Contractually Stipulated Remedies
- Liquidated damages contracted for by the parties
- Cannot be a penalty clause - test is whether amount stated is a genuine pre-estimate of loss - terms in contract are not conclusive
- Liquidated damages contracted for by the parties
- Remedies under General Law
- Self Help Remedies (Retention, Termination)
- Judicial Remedies
- As of Right: Damages, Enforcement of terms
- Discretionary: Specific performance, Injunctions
- Specific performance only granted where serves better justice than damages - Tito [1977]
- Courts refuse SP if: 1. will cause D severe hardship, 2. Contract obtained unfairly 3. Claimant does not have clean hands 4. SP is impossible
- Also SP is refused for contracts: 1. which involve personal service 2. require constant supervision 3. are too vague 4. are gratuitous
- Injunctions
- Two Types
- Prohibitory - prohibits future behavior
- Mandatory - requires D to undo past behaviour
- Two Types
- Damages
- Measure of Damages
- Expectation Interest: the profit that C has lost as a result of D's breach.
- Park B in Robinson v Harman 1848: putting the claimant into the position as if the contract was performed
- Two way of calculating: 1. Cost of Cure and 2. Diminution in value
- Cost of Cure cannot be claimed if it is unproportional cost to the benefit C would obtain
- Reliance Interest
- Being returned to the position C was in before the contract
- These claims for wasted expenditure are only allowed in exceptional circumstances
- Cannot be used to escape from a bad bargain - C&P Haulage 1983
- Can claim for wasted expenditure from before contract signing - Television Ltd v Reed 1972
- Being returned to the position C was in before the contract
- Restitution Damages
- Recovering the profit D has nade as a result of the breach
- Rarely allowed - AG v Blake 2001 - "loss of bargaining opportunity"
- Recovering the profit D has nade as a result of the breach
- Expectation Interest: the profit that C has lost as a result of D's breach.
- Park B in Robinson v Harman 1848: putting the claimant into the position as if the contract was performed
- Causation
- "But For" Test - Bank of Credit and Commerce v Ali (No 2) 2002
- Unforeseeable act of third party breaks the chain - Weld-Blundell v Stephens 1920
- Unreasonable conduct of Claimant may also break the chain - Quinn v Burch Bros [1966] (contributory negligence has no effect)
- Claimants can recover losses which are: (Hadley v Baxendale 1854)
- 1, Fairly and reasonably considered to have arises naturally from the breach
- 2. Can be reasonably supposed to have been in both parties contemplation at time of contracting(THE LOSS MUST BE FORESEEABLE)
- Mitigation
- If C does not take reasonable steps to minimise losses he will not beable to claim for full damages - Kaines UK [1993]
- But he can claim for losses caused by reasonable conduct - Banco de Portugal [1932]
- If C increases loss he cannot claim for the increase - Baxendale [1874]
- If C does not take reasonable steps to minimise losses he will not beable to claim for full damages - Kaines UK [1993]
- Measure of Damages
- Non-Pecuniary Losses
- Watts v Morrow [1991]
- Generally D not liable for distress, frustration etc
- Unless the object of the contract is to avoid such feelings or to provide pleasure
- Generally D not liable for distress, frustration etc
- Four Exceptions to the General Riule
- 1. NPL results from personal injury - Wren v Holt 1903
- 2,NPL results from physical inconvenience or discomfort - Bailey v Bullock [1950] (living in cramped conditions)
- 3. Avoiding the NPL was object of the contract - Farley v Skinner (No 2) [2001]
- 4. NPL results from injury to reputation - Bunning v Lyric Theatre [1894]
- Watts v Morrow [1991]
- Contractually Stipulated Remedies
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