Loss of bargain damages and termination under express terms (Sheville, Gumland, etc.)

Vocabulary flashcards covering the Sheville principle, loss of bargain damages, express termination clauses, anti-Sheville clauses, and key cases (Progressive Mailing House and Tabali, Gumland) discussed in the video.

Sheville principle

From Sheville v. Builders Licensing Board: if termination is under the common law, loss of bargain damages can be claimed; if termination is purely under an express contract term and there is no common law right to terminate, loss of bargain damages are not available unless the contract expressly provides for them (anti-Sheville exception).

Loss of bargain damages

Damages for the lost opportunity to bargain, including future rent and other losses. Recoverable when there is a common law right to terminate or when the contract expressly provides for them; not recoverable from purely express termination without those rights unless an anti-Sheville clause exists.

Express termination clause

A contract clause that allows termination for specified breaches; does not automatically allow loss of bargain damages unless paired with a common law right or an anti-Sheville provision.

Common law right to terminate

The traditional, non-contractual right to end a contract for breach (e.g., repudiation); enables recovery of loss of bargain damages under the common law.

Progressive Mailing House and Tabali

Cases showing that when there is repudiation (e.g., non-payment, damage, disregard of landlord’s interests), loss of bargain damages may be recoverable under the common law, contrasting with Sheville’s limitations.

Repudiation

A serious breach expressing an intention not to perform or a breach that justifies termination under the law; can trigger loss of bargain damages if a right to terminate exists (common law) or if the contract provides for them.

Anti-Sheville clause

A contractual provision declaring a term essential and a breach of that term fundamental, giving the terminating party loss of bargain damages on termination; recognized as valid by the High Court in Gumland.

Gumland

High Court case where a lease included essential terms and an anti-Sheville clause; the landlord could recover loss of bargain damages for arrears and for future rent for the entire term, illustrating enforceability of an express anti-Sheville provision.

Clause 12.1 (Gumland)

Express right for the lessor to terminate upon 7 days of rent arrears; part of the contract's termination provisions in Gumland.

Clause 7.1 (Gumland)

Covenant that rent payments are an essential term of the lease; part of the contract terms treated as essential in Gumland.

Clause 7.5 (Gumland)

Provision that the lessor is entitled to damages for breach of covenant throughout the entire term; supports recovery of loss of bargain damages under the contract.

Mitigation duty

Obligation to mitigate losses (e.g., by seeking a new tenant); applicable to loss of bargain damages and noted in Gumland as part of damages considerations.

Condition vs breach (technical sense)

Framing a term as a condition makes its breach a technical condition breach, enabling termination and loss of bargain damages if the contract expresses it as such.