Remedies

Compensatory damages

An award of money that aims to compensate the innocent party for the financial losses suffered as a result of the breach

Robinson v Harman

“the rule of the common law is that where a party sustains a loss by reason of a breach of contract, hi is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed

What can be compensated

Damages in contract law traditionally only compensate for financial (pecuniary) losses. AS a general rule, damages for mental health, disappointment, hurt feelings etc will not be awarded

Addis v Gramophone Co Ltd

D was wrongly socked from his post. He claimed that the manner of dismissal was harsh. The court held that he could only recover damages for the loss of his salary, not hurt feelings

Farley v Skinner

C asked whether a house would be seriously affected by aircraft noise, and was negligently assured no., Damages for distress and inconvenience were recoverable as peace of mind was an important part of the contract

Causation

Only losses caused by the defendant’s breach of contract can be claimed. D’s breach of contract need not be the sole cause, but it must be a substantial cause of their loss (but for test)

Stansbie v Troman

A decorator was entrusted with keys where her was contracted. When he left the premises unlocked a thief entered and stole property. the decorator was liable as his failure to secure the premises properly

Remoteness

A claimant cannot recover a loss which is too remote a consequence of the breach. D is liable:

• The loss arises naturally “in the usual court of things”

• Other losses which were reasonably within the contemplation of both parties at the time

Hadley v Baxendale

H contracted B to deliver a replacement part for a mill. The mill couldn’t work until the part arrived, unbeknownst to B. B was late and H claimed damages for lost profits. These weren’t recoverable as damage was too remote a loss for H could have had a spare, and B was unaware of the importance

Victoria Laundry v Newman Industries

V operated a business and purchased a boiler they said would be immediately used. N delivered the boiler 5 months late, meaning the laundry could take a new government contract. V was able to recover losses for the normal loss of profits, but not the gov contract as it was too remote

H Parsons (Livestock) Ltd v Uttley Ingham

Ds installed a pig nut feeder, but failed to open the ventilation, causing it to go mouldy which killed many pigs. Damages were recoverable, as the death of pigs wasn’t too remote

Agreed damage clauses

Sometimes parties may agree in advance the damages to be payable in the event of a breach. This allows both sides to know in advance liability. These will apply unless considered “manifestly excessive” (Cavendish v Makdessi)

Absence of agreed damages

the starting point in assessing damages if the difference in value between expectation and actuality. The cost of repair or achieving the contractual performance is only recoverable if reasonable

Ruxley v Forsyth

C employed D to build a pool. The pool was built 7 inches shallower, but there was no difference in value as it was still safe. C wasn’t able to claim damages as rebuilding the pool would have been out of proportion

Anglia television v Reed

A TV company incurred expenses making a film. The company had signed an actor Robert Reed to stat, who then backed out in breach. The lack of substitute meant Anglia could recover the money spent

Wiseman v Virgin Atlantic Airways

W could recover the cost of living when he was wrongly stopped catching a return flight home, but he couldn’t claim for his break up or treats to himself as he was under a duty to mitigate his losses.

British Westinghouse v Underground Electric Railways

Goods delivered were defective. the replacement turned out to be more efficient than the originals, so the company obtained benefits over what they’d have gotten originally. These benefits were considered when calculating damages

Equitable remedies

Equitable remedies can be awarded where damages alone is an inadequate remedy and justice would not be served merely by damages. These are awarded at the courts discretion

Specific performance

This is a court order compelling someone to perform their obligations under a contract. Awarded in limited situations

Damages as inadequate

If the claimant could easily purchase replacement goods or performance, specific performance will not apply. However it can be available where the subject matter is in someway unique

Beswick v Beswick

An uncle old his business to his nephew in return for an annual allowance to him and his widow upon his death. The court ordered specific performance when the nephew didn’t pay

Patel v Ali

C asked for specific performance on the sale of a house, the court refused as D was suffering health issues and needed to be at home. Enforcing specific performance would have caused hardship

Where the contract was unfairly obtained

In (Walters v Morgan) C pressured D into signing a mining lease. When D discovered the value of the land, he refused the mining. Specific performance wasn’t allowed as C pressured D into the agreement

Ryan v Mutual Tontine

The lease of a flat promised tenants that a porter would be constantly in attendance. The porter was absent but specific performance wasn’t allowed as it would have required constant supervision

Co-op v Argyll Stores

Ds had a 35 year lease to operate a supermarket. it was making a loss so Ds decided to close. the court refused to order specific performance as it would not compel a business to keep trading at a loss

Injunctions

An injunction is usually a court order instructing people not to do something. The most usual type is a prohibitory injunction. These prevent future breaches of contract, and may be temporary or permanent

Lauritzencool v Lady Navigation

There was a dispute about a time charter. The shipowners alleged that the hirers had breached certain duties under the contract and so wanted to withdraw early. The court issued an interim injunction preventing them from withdrawing ships until the issue was resolved with arbitration

Page one Records v Britton

A band appointed a manager on a 5 year contract. Ds wished to end the contract early and the manager sought an injunction preventing this. The court refused as its effect would be to force the parties to work together

Rescission

An order of the court which sets aside the contract and returns the parties to the position they were before the contract. It is a drastic remedy as it brings the contract to an end

Restriction on rescission

• Third party now has some rights

• Affirmation of the contract has occurred

• Impossible to restore the parties to their original positions

• Lapse of time has occurred

Consumer remedies

Implied remedies by the Consumer Rights Act 2015

• S.20: short term right to reject

• S.23 Right to repair or replacement

• S.24 Right to price reduction or final right to reject

• S.55 Right to repeat performance

• S.56 Reduction in price