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REMEDIES [Damages] prt.1. - Coggle Diagram
- REMEDIES [Damages] prt.1.
- purpose of damage is to put V in the position they would've been in if contract had be properly completed & performed by D.
- therefore, court is looking at what should've happened & consequences of non/part-performance
- damages are usually awarded for expectation loss (loss of bargain) or reliance loss (wasted expenditure)
- there's some situations which don't fit the normal pattern
- if no loss suffered but there's still breach, court may award 'nominal damages'.
- in Staniforth v Lyall (1830), award of nominal damages was made as claimant had made no loss. in fact, main purpose of bringing the case was to have proof that contact was at an end
- Staniforth v Lyall (1830)
- Lyall was under duty to load his cargo onto C boat by certain date
- he failed & boat owner sued for breach
- C hired his boat out to another party immediately following the breach for greater profit than he would've made from D
- he succeeded in having contract declared terminated but having suffered no loss, was awarded a nominal sum only
- there was no risk of being in breach or of being unable to rehire the boat to someone else without being in breach, as contract had been terminated by the breach
- some case substantial damages have been awarded where nominal may have been seen as more appropriate.
- Experience Hendrix LLC v PPC Enterprises Inc. (2003)
- after death of Jimi Hendrix, D had been granting licenses to exploit master recording containing works featuring Hendrix, in breach of a 1973 agreement settling earlier litigation
- there was no evidence to show or quantify any financial losses suffered as result of the breaches
- court stated D should make a reasonable payment for its uses of master recordings in breach of the settlement agreement - that is, more than just nominal damages
- this is sometimes called a 'Wrotham Park' award, following the case of Wrotham Park Estate Co. Ltd v Parkside Homes Ltd (1974) but is now known as negotiating damages
- Wrotham Park Estate Co. Ltd v Parkside Homes Ltd (1974)
- C sold land which was subject to a restrictive covenant preventing building on it
- however, D built and sold houses on the land, C asked Court for an injunction order that the houses be demolished
- court wouldn't grant order for demolition of the house on basis it would be unfair to inhabitants of the houses
- instead court decided to award damages to represent the amount that the C may have accepted in exchange for release of the restrictive covenants (even though C would never have agreed to this at any price)
- instead of working out how much innocent party has lost or how much the wrong-doer has gained, Wrotham Park damages try to quantify the sum which may reasonably have been negotiated between the parties for giving permission to the wrong-doer to act as they did
- difficulty with Wrotham park damages is it's not clear when they should be awarded
- Morris-Garner v OneStep (Support) Ltd (2018), it was stated that Wrotham Park damages:
- should be awarded when C would have very real problems in establishing financial loss
- is a 'just' response to a breach of contract
- should not be restricted to exceptional circumstance
- 1 more item...
- court have been careful to avoid granting speculative damages. (Addis v The Gramophone Company 1909)
- but in chaplin v Hicks (1911) C succeeded
- there's cases allowing damages of a highly speculative nature for mental distress whilst also recognising the problems with respect to privity of contract such as Jackson v Horizon Holidays Ltd (1975)
- damages for loss of amenity have been allowed where the sole purpose of the contract was to provide the pleasurable amenity (Ruxley Electronics and Construction Ltd v Forsyth (1996))
- distinction between expectation loss and reliance loss
- Expectation loss = the normal measure of damages for breach of contract & refers to innocent party's loss of bargain
- this inc. profits it would've expected to receive had contract been performed, taking into account costs it would've incurred to earn that profit
- aim is to put C in same positions as if contract had been performed
- reliance loss = wasted expenditure. refers to expenses incurred by C in reliance of contract being performed.
- aim of damages for reliance loss = put C in position he/she would've been in had contract never been made; here C has incurred expenses in preparation for contract that's expected to be performed but has not been.
- expectation loss and reliance loss are mutually exclusive to prevent double recovery of damages
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- C may also recover expense he/she has had to spend in advance if a contract that has been breached
- Anglia Television Ltd. v Reed (1972)
- Anglia TV spent lots of money preparing for a film inc. fees paid to director, designer and stage manager.
- Reed [american actor] agreed to be main actor but pulled out
- suitable replacement couldn't be found so film wasn't made
- as Anglia TV couldn't predict what its profit on film would've been, court awarded damages based on reliance loss
- Reed must've known that such expenditure was likely & was liable for the expenses incurred by Anglia TV, both before and after the contract was made, up to breach.
- its also possible sometimes to recover damages for the loss of an amenity
- Claimant asked D [surveyor] whether the house he was to buy was subject to aircraft noise
- D incorrectly reassured C that it wasn't
- court said that an innocent party was entitled to be placed in the position he would have been in had the party in breach exercised due care
- damages were recoverable for distress & inconvenience where the matter was important to C, that had been made clear to D, and the required action had been incorporated into the contract
- court viewed as appropriate an award of £10k for discomfort of suffering aircraft noise
- restitution = repayment of any money or other benefits passed to D in advance of the contract that is breached
- loss of bargain (expectation loss)
- idea = place claimant is same financial position as if contract has be properly performed. this can be seen in numerous ways:
- difference in value between goods or services required in contract and those actually provided
- Bence Graphics International Ltd. v Fasson UK Ltd. (1996)
- D supplied vinyl film to which C printed identifying markers (decals) to put on bulk containers.
- there was implied term that decals would survive in a readable form for 5 year but they only last 2.
- court awarded damages amounting to actual loss incurred by having to replace the decals
- where there is a market damages will be difference between contract price & price in the market. if C's profit remains there's no loss.
- Charter v Sullivan (1957)
- D contracted to buy a Hillman Minx car then refused to take delivery.
- because demand for this car easily outstripped supply, seller could easily sell car & make his profit
- therefore only nominal damages were awarded
- however, if there's no available market C can recover full loss
- WL Thompson Ltd. v Robinson Gunmakers Ltd. (1995)
- D agreed to buy standard Vanguard car but later fused to accept & pay for it
- supply of standard vanguard car exceeded demand
- had garage found another customer & sold to him/her as well as D then there'd have been 2 sales and 2 profits
- therefore damages were awarded for loss of profit on one sale
- loss of profit not just for goods, but also in other contract as in Victoria Laundry Ltd v Newman Industries Ltd (1949) where C recovered profit he'd of made but for breach of contract
- loss of a chance - generally a speculative loss isn't recoverable in contract & most cases are based on negligence rather than contract
- in Chaplin v Hicks (1911) there was exception where actress lost chance of being slected for the part. court stated mere fact that damages were to difficult to calculate shouldn't prevent then being awarded
- basis for claim in damages
- problem for courts = establish how much the loss will be.
- damages = compensatory, they'll not include loss which are too remote to be awarded
- compensatory damages = main type of damages. we need to consider:
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