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(6) SOG: Remedies for breach of k (general) (compensatory damages (Limits…

- - - - penalties [ct will not enforce (lasseiz faire approach) i.e. if X amount due .. Out of proportion of any legitimate interest (sum in contract was too high to be reasonable], the ct will deemed as penalty and not enforceable, and suggest alternate amount ]
        
        not massive in the course, but look out for those below.
        
        Parties may agree a stipulated sum to be paid on breach
        This will only be payable if it is regarded by the court as “liquidated damages” rather than a “penalty”
        Such a sum is not a “penalty” if, judged at the time the contract was made, it is not out of all proportion to a legitimate interest of the claimant in the performance of the contract
        
        (Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67 - often referred to as companion case ParkingEye) - impt case - about parking charges. If you overstay time, pay ie £700.. Breaching penalty clause. A parking fee in this case is NOT a penalty and thus enforceable. But if the ct feels that it is a penalty rather than a reasonable estimate of a loss, then it will not be enforceable
      - mitigation [if u r innocent party, u have been wronged. If u can reasonably reduce losses nontheless, law will expect u to do that i.e. party did not bother to resell goods to make up the money to mitigate the loss]
        
        the claimant cannot recover for loss that it should reasonably have avoided (we will return to this later in the context of sales)
      - remoteness [losses party has suffered is attributed to defendants breach and what is the result of other things. Remoteness test is much more restrictive than tort] and
        
        Remoteness: the loss is too remote if that type of loss could not reasonably have been contemplated by the defendant at the time the contract was made [Hadley v Baxendale] and if the defendant did not assume responsibility for that loss [ "extent" The Achilleas -famous hoffman case]
        
        (Hadley v Baxendale (1854 9 Exch 341 and The Achilleas [2008] UKHL 48)
        Example: A hires taxi driver. A is going to chicago to earn money (enter into k relationship… taxi driver breaches k to get A to airport… miss flight, meeting, lost out on money, taxi caused him to lose 3mil £. Law unlikely to hold liable for 3m. Deemed per Hadley and Archilleas as "too remote" taxi driver did not assume responsibility. The TYPE and EXTENT is where it gets controversial. Archilleas talks about EXTENT.
        BUT IF A paid £7k to get taxi on time, then taxi would be known to be liable for the huge loss. [THIS IS WHY REMOTENESS IS IMPT]