Remedies I REMEDIES · Damages · Equitable remedies - Specific performance - Injunctions Purpose of Damages Restitutio in integrum Put parties in the position they would have been in had the contract been performed (lost profits may be recoverable) - Farley v Skinner (2001) Compensation not punishment - Ruxley Electronics v Forsyth (1995) - No loss, nominal damages only Measure of Damages · Expectation interest · Reliance interest · Restitution Expectation interest Lost profits on the transaction recoverable Eg - A contracts to sell goods to B for £5,000. A knows that B will adapt the goods and resell them. If A fails to deliver, B can claim the lost profits on the resale. Price £5,000 Cost of adaptation £1,000 Resale price £7,500 Damages = £1,500 Problems with Expectation Interest Loss of a chance Chaplin v Hicks (1911) Cost of putting claimant in position if contract performed properly is disproportionate Ruxley Electronics v Forsyth(1996) Contract price £70,000 Swimming pool 9 inches too shallow Cost of remedying - £20,000 Damages - £2,500 for 'loss of amenity' only Reliance Interest Reliance interest = recovery of expenditure incurred, rather than lost profits Anglia Television v Reed (1972) - difficulty in estimating lost profit C & P Haulage v Middleton (1983) - not available where claimant has made a bad bargain Restitution NB two uses of the word 'restitution' In damages context - recovery of money paid under a contract which has been broken - eg return of defective goods, in exchange for a refund
Other meaning - preventing 'unjust enrichment' Unjust enrichment and contract damages · Surrey v Bredero Homes (1993) · Attorney General v Blake (2001) (See Lecture 22b) Non-Pecuniary Losses "Pain and suffering" consequential to a breach can be recovered Watts v Morrow (1991) Contract breaker not generally liable for distress, etc May be liable where Object of contract is to give pleasure (eg holiday) Mental suffering results from physical inconvenience and discomfort Non-Pecuniary Losses (cont) Farley v Skinner (2001) 'Pleasure' need not be the only objective 'Noise' = physical discomfort Hamilton Jones v David Snape (2004) Solicitor's failure to ensure children were not removed from the country Contract was mainly to ensure claimant's peace of mind Damages of £20,000 Limitations on Damages · Rule of remoteness · Mitigation · Contributory negligence Remoteness Hadley v Baxendale (1854) Loss recoverable if it was: arises'according to the usual course of things' was within the reasonable contemplation of the parties as the probable result of a breach Victoria Laundry v Newman (1949) Loss on normal contracts recoverable Loss on special contracts irrecoverable Remoteness (cont) Koufos v Czarnikow, The Heron II (1969) Contract test is stricter than tort 'Reasonable contemplation' = would a person in the position of the defendant have seen result as 'not unlikely' Jackson v RBS (2005) likelihood of loss must be assessed at time of contract, not breach Remoteness (cont)
Type of loss must be foreseen, rather than its extent Parsons v Uttley Ingham (1978) Transfield Shipping v Mercator (2008) Possibility