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Remedies In Contract Notes

BPTC Law Notes > BPTC Civil Ligitation Notes

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A more recent version of these Remedies In Contract notes – written by City Law School students – is available here.

The following is a more accessble plain text extract of the PDF sample above, taken from our BPTC Civil Ligitation Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

BREACH OF CONTRACT LIABILITY Performance

? general rule o failure to perform = breach
? concurrent obligations o each party's right to other's performance depends on readiness, willingness and ability to perform:

(a) entire contract - one party bound to complete performance before other under obligation to perform at all

(b) part performance - one party substantially performs; other party's obligations NOT discharged, but counterclaim for discrepancies can be made

(c) quantum meruitinfer fresh agreement that payment will be made for part performed if:

i. benefit conferred by part performance; AND ii. possible for benefit to be accepted OR rejected; AND

iii. one party preventing other from performing
? cases where NO actionable breach (a) parties agree (b) contract frustrated (c) contract provides for situation that has occurred (i.e. valid limitation / exclusion clause)

(d) limitation period expired Breach

? definition of repudiatory breach o guilty party expressly or impliedly: (a) communicates intention to renounce obligations; OR (b) absolutely refuses to perform o time of refusal (a) anticipatory breach: before performance falls due (b) whilst contract remains part performed
? the right of election o under common law innocent party can: (a) terminate (rescind / discharge) contractinnocent party informs breaching party via unequivocal act that it:

i. accepts repudiatory breach; AND

ii. NO longer wants to continue with contracteffect: brings to end any unperformed future obligations under contractright to terminate lost if innocent party affirms contract

-------OR-------

(b) affirm contractguilty party can complete performance as agreedinnocent party can claim damages for remaining lossif contract remains unperformed, innocent party can claim damages for failure when performance falls due summary

(a) (b) (c) (d)

conditionright of election + damages

innominate termright of election + damages

repudiatory breachright of election + damages

warrantydamages only

ISSUES PRELIMINARY TO OBTAINING A REMEDY Breach must cause loss

? effective OR dominant cause of loss (but for breach, no loss)
? NOT just an opportunity to sustain loss
? multiple causes o ? 1 of several equal causes o ? breach partly causes loss AND loss otherwise due to actions of 3rd party only if acts of 3rd party contemplated by D Standard of proof

? general rule o C must prove: (a) fact of damage; AND (b) amount (difficulty in assessment NOT bar)
? standard o = reasonable certainty unless absolute certainty possible o speculative casese.g. loss of profit= substantial chance / probability

DAMAGES IN CONTRACT Purpose of damages

? compensate C for loss

? if loss CANNOT be proved, nominal damages only
? D's gain rarely considered (except restitution)
? loss =
(a) PI (b) property damage (c) diminution in C's assets Methods of calculating loss

(a) expectation loss - put C in position would've been in had contract been properly performed

o includes: i. loss of promised performance; AND ii. loss of profit from NOT being able to use performance o quantification (common sense which is best) i. cost of cure (reinstatement)= extra cost C will have to incur to put self in position would've been in if had received benefit of contractawarded if:

o C has mitigated; OR o C genuinely intends to use damages to mitigate (i.e. cure)

ii. difference in value (diminution in value)= advantage C lost by being deprived of benefit of contractawarded if:

o court does NOT believe C genuinely intends to use damages to mitigate

o claim for negligent performance of contract against surveyor (usually)

o loss of profit= delayed / lost performance prevents C making anticipated profitsometimes in addition to other methodsproblems?

too speculative, remoteness, evidential proofe.g. bonus

no difference between market price + contract pricecan only claim loss of profit if can prove = available market:

o actual sale - available buyer prepared to pay fair price on that day

o hypothetical sale - enough traders in contact with each other to evidence market in which goods could've been sold

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