Contract Law - Week 21 Lectures Remedies 1 - Damages Definition A monetary award aimed at putting the claimant in the position he/she would have been in if the other party had performed according to the contract. . Essentially contractual damages are aimed at getting the innocent party to the position that they should have been placed in if the contract had been performed satisfactually Damages in contract and tort • A claim for breach of contract allows the claimant to be compensated in line with the benefit which would have accrued to him/her if the contractual obligations had been performed satisfactorily. · Therefore, the claimant is put in the position he/she expected to be in. . Whereas in Tort, damages aim to restore the claimant to the position he/she would have been in had the Tort not occurred. • Different aim to damages than contract The Aim of Contractual Damages Robinson v Harman (1848): . "the rule of the common law is, that where a party sustains loss by reason of a breach of contract, he 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." Aim Farley v Skinner [2001] - Lord Scot . "the basic principle of damages for breach of contract is that the injured party is entitled, so far as money can do it, to be put in the position he would have been in if the contractual obligation had been properly performed. He is entitled, that is to say, to the benefit of his bargain." o Evident that the aim of contractual damages is the aim of compensation in line with the claimants expectation Measure of damages • Expectation Interest o Equates to the net value of what the innocent party would have received if the contract had been performed · Reliance interest o The extent to which the innocent party is worse off as a result of relying on the contract • Restitution Interest o Defendant has to give back or give up some or all of the profits that he made from his breach of contract
Example · Courts have to get involved in calculations when determining what damages to avoid . Contract for the sale of a Mac Computer. Claimant paid £1500 for it and was hoping to re-sell it for £2000 if the computer was delivered in good condition as indicated in the contract. · Expectation interest- if defendant delivered a defective computer the expectation interest will be £1000 ie the net loss-If it is delivered in defective condition and now worth just £1000; if there is no delivery and claimant has not paid the price, then the net loss will be £500. - difference between what the claimant will have and what it expected to have - if C hadn't paid the £1500 yet then if there was no delivery then the claimants net loss will be £500 which is difference between £1500