Breach of contract and remedies

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  • Created by: Lucy
  • Created on: 18-07-15 10:04
Breach of contract
Failure by a party to perform his obligations under that contract or an indication of his contract not do so (anticipatory breach)
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Contracts discharged by
complete and exact performance
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Anticipatory breach
if breach takes place before appointed time for performance of contract
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Injured party of anticipatory breach can
Sue at once for damages, wait until time of performance to see if party carries out their side of agreement, ignore breach, carry out their side in full then sue for full contract - ignores duty to mitigate losses
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Hochster V de la tour
D hired H as courier from June 1852. In May 1852, D told H that his services were no longer required. Held: H could sue for breach from date of being given notice + did not have to wait til June to commence breach.
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White V Carter (Councils) V Mcgregor
M's sales manager contracted with W to put M's face on every litterbin in Glasgow for 3 years. M contacted W to inform them that he did not intend to honour the contract. W ignored M, carried out the contract + sued for contract price. Held: M liable
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Supervening events
the risk of waiting for the time of performance is that something may happen between the date of the anticipatory breach and the time of performance that renders the contract impossible to complete.
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Avery V Bowden - Contract discharged by Supervening Events
B chartered A's ship + agreed to load it with cargo at Odessa within 45 days. A took ship and waited. B told A he changed his mind and A should leave. A waited to see if he'd change his mind. Before end Crimean War broke out - make contract illegal
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The aim of court
compensate injured partyfor breach of contract. - main remedy, always available under Common Law.
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Liquidated damages
Pre-estimate by parties of damage caused by potential breach. Courts allow if they are genuine attempt to pre-quantify potential loss. Set aside if they are seen as penalty causing bad bargain for one party,
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Jeancharm ltd V barnet footbal cluvb ltc
Contract for sale of kit to B specified 5% per week interest on late payments. B accepted. i.e. equality of bargaining power, adequate knowledge of clause + agreement. Held: Court set aside as it was a penalty.
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Unliquidated Damages - Also known as Doctrine of restitution
intended as compensation for claimant's loss, to put him in the position he would have been in had the contract been performed, not punishment for defendant.
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Ruxley electronics and constuction ltd V forsyth - disproportionate costs
Swimming pool built slightly shallower than agreed. Correcting defect required demolishing the shallower pool. Held: Cost of work was disproportionate to its benefit + loss of value based damages should be paid.
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Types of loss recoverable
Financial loss, personal injury, damaged property, disappointment, vexation, mental distress.
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Jarvis V Swan Tours - loss of enjoyment
S promised 'house party' afternoon tea, cake, yodeller and English speaking manager. Manager spoke no english, tea was crips + dry nut cake and yodeller was local man. Held: J awarded £125, even tho cost £63.
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Contracts for provison of pleasure
allow damages to be claimed for disappointment or loss of enjoyment.
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Remoteness of damage
damage must flow naturally from breach and ought to have been in reasonable contemplation of parties at the time the contract was made.
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The H/eron II (Koufos V Czarnikow)
Ship owner 9 days late delivering sugar to Basra. During time sugar price fell, causing sugar owner lose money. Basra has well known sugar market. Held: Ship owner ought to have reasonably contemplated sugar owners intention to sell sugar.
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Hadley V Baxendale - reasonable contemplation of both parties
B slow delivering broken drive shaft for mill to repairer. Mill idle. H sued for loss of profits. Held: damage too remote, B might have expected H to have spare shaft + B was not told of consequence of delay. B = not have reasonable contemplation.
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Victoria laundry ltd V Newman industries Ltd
N 22 weeks late in delivering boiler for V. Held: V entitled to loss of normal profits but not loss of profits for 'one-off' dyeing contract. Was not in reasonable contemplation
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Who should take reasonable steps to mitigate loss
claimants
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Equitable remedies
damages are the default common law remedy.
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Specific performance - often used to enforce contracts for sale of land. Not available if:
damages are an adequate remedy, contract personal services, court would not be able to oversee the performance, specific performance causes unfairness.
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Injunction
Forces to not breach and stand by contract
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Warner Bros V Nelson
N had contract tying her exclusively to W for 12 months. She tried to work for a competing studio.Held: W entitled to an injunction forcing N to honour contract.
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Rescission
Go back to start - put parties back into their pre-contractual position. allows party to recover property transferred under the contract.
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Quantum meruit
for what it is worth (part payment) - Claimant brings an action for the value of work done in partially completed contract.
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Other cards in this set

Card 2

Front

complete and exact performance

Back

Contracts discharged by

Card 3

Front

if breach takes place before appointed time for performance of contract

Back

Preview of the back of card 3

Card 4

Front

Sue at once for damages, wait until time of performance to see if party carries out their side of agreement, ignore breach, carry out their side in full then sue for full contract - ignores duty to mitigate losses

Back

Preview of the back of card 4

Card 5

Front

D hired H as courier from June 1852. In May 1852, D told H that his services were no longer required. Held: H could sue for breach from date of being given notice + did not have to wait til June to commence breach.

Back

Preview of the back of card 5
View more cards

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