REMEDIES including damages and equitable remedies Objectives Describe

REMEDIES including damages and equitable remedies

Objectives • Describe the types of common law remedies that can be awarded. • Explain the types of equitable remedies that can be awarded, including specific performance and injunctions. • Evaluate the limitations on the awarding of remedies under the law of contract.

Common Law Remedies Damages All common law remedies are available as of right if a contract is breached. The purpose of damages in contract law is to put the victim, so far as it is possible and so far as the law allows, in the same position he would have been in had the contract not been broken but had been performed in the manner and at the time intended by the parties. Pecuniary Losses - these are the financial losses that result from a breach of contract. Non-pecuniary Losses – these are other losses, such as mental distress, disappointment, hurt feelings or humiliation. Traditionally, these are not compensated but this rule has been relaxed for contracts which are specifically for pleasure, relaxation and peace of mind. Key Cases: Jarvis v Swans Tours Ltd (1973), Farley v Skinner (2001)

Common Law Remedies Damages Limitations on the awarding of damages. § Causation – a person will only be liable for losses caused by their breach of contract – Quinn v Burch Bros (Builders) Ltd (1966) § Remoteness – a defendant will only be liable for such losses as were “reasonably foreseeable” as arising from the breach – Hadley v Baxendale (1854) and later in Transfield Shipping v Mercator Shipping [The Achilleas] (2008). Also see the case of Wiseman v Virgin Atlantic Airways Ltd (2006) § Mitigation – claimants are under a duty to mitigate their loss, on other words they cannot recover damages for losses which could have been avoided if they had taken reasonable steps – Pilkington v Wood (1953)

Common Law Remedies Damages Calculating Loss. § Loss of expectation – the courts will aim to put claimants in the position they would have been in had the breach not occurred – i. e. the claimant would have expected a certain result from the contract so the damages will compensate for the loss of this expectation – Golden Victory case (2007) § Reliance Loss – where this is the basis for calculating damages, the courts will seek to put the claimant in the position they were in before the contract was made. – Anglia Television Ltd v Reed (1972) A claimant can choose whether to base a claim on a loss of expectation or a loss of reliance. A claimant cannot claim for both. Loss of expectation is the most common.

Common Law Remedies Damages Loss of expectation. § The idea here is to put the claimant in the same financial position as if the contract had been performed. This may be: a) The difference in value between the goods or services of the quality indicated in the contract and those actually delivered where they are of inferior value. b) The difference between the contract price and the price obtained in an ‘available market’ – Charter v Sullivan (1957) c) Loss of profit d) Loss of a chance – Chaplin v Hicks (1911)

Common Law Remedies Compensatory Damages § These are repayments to the claimant of any money or benefits passed to the defendant in advance of the contract. Restitution in theory, is available where there is no contract, which could be for the following reasons: - a contract has not been made - the contract has been discharged, or - the contract was void (e. g. because of illegality) • Key Cases: Fibrosa Spolka Akcyjna v Fairbarn Lawson (1943) Hunt v Silk (1804) • Law Commission: Pecuniary Restitution on Breach of Contract (No. 65) and later No. 121.

Common Law Remedies Compensatory Damages These are the recovery of an unqualified sum in respect of services already rendered. There are three common circumstances where such an award is made: 1. Where there is a contract for services that is silent on the issue of remuneration – Upton RDC v Powell (1942) 2. Where the circumstances of the case show that a fresh agreement can be implied in place of the original one – Steen v Bromley (1919) 3. Where a party has been elected to consider the contract discharged by the other’s breach, or where a party has been prevented from performing by the other party, in either case they might claim for work they have already done – De Barnady v Harding (1853)

Equitable Remedies Rescission An order of rescission is an order compelling a contract to be rescinded, i. e. put the parties back to their original state as if the contract had never been made. See: Leaf v International Galleries (1950)

Equitable Remedies Specific Performance An order of Specific Performance is an order compelling one side of the contract to perform their obligations under a contract. For Specific Performance to apply: § Damages must be inadequate – Beswick v Beswick (1968) § It must not cause any hardship to the defendant – Patel v Ali (1984) § The contract must have been made fairly – Walters v Morgan (1861) Exceptions: § Contracts involving personal services § Contracts which involve continuous duties § Contracts which are vague as to the performance required

Equitable Remedies Rectification An order of rectification is an order compelling a contract to be amended. See: Cooperative Insurance Society v Centremoor Ltd [1983]

Equitable Remedies Injunctions An Injunction will usually compel the defendant to do a particular thing. Key Cases: § Warner Bros Pictures v Nelson (1937) § Page One Records Ltd v Britton (1968) § Warren v Mendy (1989) § Lauritzencool AB v Lady Navigation (2005)