LECTURE 16 - REMEDIES 1: DAMAGES - CONTRACT 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. 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 is expected to be in. - Whereas in tort, damages aim to restore the claimant to the position he/she would have been in the tort had not occurred. The aim of contractual damages - Robinson v Harman (1848) o "the rule of the common law is, that where a party sustains a 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. - Farley v Skinner (2001) - Lord Scot o "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 if the contractual obligation had been properly performed. He is entitled, that is to say, to the benefit of his bargain" 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 the contract Example 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- 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. Reliance interest- as regards the defective computer, will not be as favourable as expectation interest- it will be £500. However, the reliance interest may be higher in a situation of 'bad bargain' but the claimant will not be allowed to recover that amount if it shifts the loss to the defendant. Choice between Expectation and Reliance Interests - Which of these measures can be claimed by a claimant in an action for damages for breach of contract? - What factors would persuade a claimant to elect to seek the recovery of one measure rather than another? - The normal approach to contractual damages - giving the claimant the value of his expectancy (expectation interestff - will normally