DAMAGES: COMPENSATORY DAMAGES; CAUSATION AND REMOTENESS OF DAMAGE; MITIGATION OF LOSS

BASIS FOR A CLAIM IN DAMAGES

  • claim is automatically available “as of right”

  • no need to prove actual loss

  • aims to put the party in the position they would have been in had contract been properly performed

  • not all losses are the subject of compensation as not all losses are foreseeable

  • there is a test of remoteness

FORSEEABILITY OF THE LOSSES

HADLEY V BAXENDALE Loss must not be too remote- if it is then not recoverable. Rule is that damages are recoverable from:

  1. LOSS ARISING NATURALLY FROM THE BREACH

  2. LOSS WHICH WAS IN CONTEMPLATION OF THE PARTIES AT THE TIME THEY MADE THE CONTRACT

VICTORIA LAUNDRY V NEWMAN INDUSTRIES

HADLEY V BAXENDALE RULE MEANS C’S CANNOT ALWAYS RECOVER ALL THE LOSS THEY HAVE SUFFERED

VL sued when D’s failed to deliver a boiler on time- the boiler was delivered 5 months late. VL was awarded:

  • normal loss of profits YES but not

  • additional loss of profits , as the boiler company never knew about any special contracts that VL had with others.

PARSONS V UTTLEY INGHAM

principle - if there is a ‘serious possibility’ of damage- the extent of damage is not relevant

THE HERON II

Contract to transport cargo of sugar and delayed by 9 days. Market price of sugar dropped after this delay and C sought to recover the difference from D for their breach of contract. D argued damages were TOO REMOTE, since D must have known that market prices fluctuate, the loss would have been in his contemplation as a possible result of the breach

LIQUIDATED DAMAGES

  • amount of damages is FIXED in a contract

  • not enforceable if seen as a PENALTY CLAUSE

  • DUNLOP V GARAGE said an extravagant sum will be a penalty

  • since then, CAVENDISH SQAURE V TALAL and PARKING EYE V BEAVIS 2015 have clarified the law:

  • it will be a penalty clause where it is exorbitant or unconscionable. If it is that a penalty clause can the party show that it protects a legitimate interest?

basis for a claim in damages, Special situations, Foreseeability of the losses, mitigation, enforceability of liquidated damages clauses

EQUITABLE REMEDIES- not common law as they aren’t ’available as right’ only available at courts discretion

maxims:

  • ‘come with clean hands’

  • ‘he who sees equity must do equity’

  • ‘delay defeats equity’

SPECIFIC PERFORMANCE

Equitable remedies are all based on fairness, a will be awarded in situations where justice would not be served by damages alone.

Damages are a right, equitable remedies are not a right - they are granted at the courts discretion. 

It’s important to remember that equitable remedies are discretionary - described by a judge that equity was only ‘a gloss on the common law’ - intervening only where justice isn’t achieved by the common law.

Airport Industrial GP Ltd V Heathrow Airport (2015): A judge decided that using his discretionary equitable remedy of specific performance would bankrupt a company so did not use his power.

  • not awarded where it would be hard to supervise

  • not awarded where it would cause undue hardship as unfair on party- heathrow case

  • not awarded where someone else might be unjustly enriched- beswick v beswick

  • not available where the court

PATEL V ALI- had to pay damages, if forced out of house through specific performance, she would suffer undue hardship n

INJUNCTIONS

  • prohibitory injunctions - most common

  • interim injunctions

  • mandatory injunctions - telling someone to do something

  • injunctions can’t be used a back door method to enforce a contact for employment for which specific performance is not available

  • PAGE ONE RECORDS V BRITTON

  • WARNER BROS V NELSON- court order stopping/preventing someone from doing something like breaking a contract. Awarded an injunction.

  • CHAPPELL V TIMES- working for times newspaper, injunction was not fair - no right to strike

DUE TO MITIGATE LOSS

General principle that party who suffers breach should take reasonable steps to minimise the effects of the breach- mitigation of loss. If injured party does not do this, D will not be liable for damage resulting from their unreasonable failure to do so. The mitigation of loss will also be taken into account when assessing how much damages are due.

BRITISH WESTINGHOUSE ELECTRIC- d had to pay less damages as C hadn’t suffered much loss

A C is not bound to go to extraordinary lengths to mitigate the loss, only to do what is reasonable.

In anticipatory breach situations- a failure to sue when aware of an anticipatory breach is NOT a failure to mitigate loss.

WHITE CARTER LTD V MCGREGOR: the argument that the c’s might have mitigated the loss by not continuing to advertise on the bins failed.