Remedies

Divided into two categories:

1) Buyer’s rights

The buyer may have 2 rights:

Repudiation (condition, consequence of innominate term)

The first is related to the sellers breach of condition, warranty or the breach of some other innominate term.
If the innominate term is to be treated as a condition then this will lead to repudiation.
Certain terms implied term into the contract by statute are to be treated as conditions. So this is a situation where the goods do not conform to contract…ex cetera.

Rejection (separate, ‘mere’ termination of contract; not repudiation ab initio – as in misrepresentation)

The right of rejection is a separate right. This stops the contract and leads to a mere termination of contract
It is not repudiation ab initio as we see in misrepresentation

There may be situations where the right of repudiation and the right of rejection come together.

Damages

Hadley v Baxendale (1854)

Simply saying that on the question of whether damages should include profits, the response to that is no.
We look at things that are consequential…consequential losses. The loss that is linked to the breach.
Damages should not include profits, should only be that, which ought to be foreseeable from the breaching parties perspective.
Idea of foreseeable loss.

Parsons v Uttley Ingham [1978]

Pigs owned by the buyer, died when they ate some mouldy nuts
Question was whether the manufacturer of the machine which distributed these mouldy nuts, could be held liable for the pigs death
- Of course pigs are property so the question is whether one should be able to claim for damages caused by the breach
- And there was a breach
The courts said that it could extend damages to property. Even for the veterinarian fees (for the pigs illness). But not extend so far to cover profits
Because the profits would be economic loss

Cullinane v British Rema Manufacturing [1954]

The courts effectively said that you have to choose between wasted expenditure as loss, and profit, expected profit (wasted expenditure versus expected profit
The problem with expected profit is that it is quite difficult to prove
Profits are always fluctuating according to the market conditions
So the courts find that there isn’t enough certainty in that. So the courts are seeking certainty, and what is quantifiable. The affected party can produce receipts, and show the wasted expenditure. So you can claim for that, but you cannot claim for both. So the expenditure must be leaked to the breach of contract as well

Golden Strait Corp v Nippon Yusen Kubishika Kaisha [2007]

The general principle coming out of this case is that damages are assessed at the time of breach or when the loss at suffered (typically this is at the breach) or may be at some later stage.
For instance the seller may breach and the performance may become due at some later stage, delivery may be for a later date, and the seller already says “I will not deliver”. So we have an anticipatory breach, which happens much earlier than when performance is due. So the courts will say that when performance becomes due this is when we will assess the damages. That’s quite important because of the fluctuation of market prices since it is at the moment when performance becomes due that the buyer must then go out (or at the later stage) in the open market and procures the goods that he needs to replace the goods - clearly he his likely to suffer loss there.
Links back to a much earlier case Johnson v Agnew. The principle there was the earliest moment at which the buyer can mitigate his loss so when he learns of the breach, when performance becomes due. At whichever moment is earliest, for him to be able to mitigate his loss. So that is where we see the duty to mitigate loss arising.

Repudiation (from the buyer’s standpoint)

In the event that the seller does not deliver, then the buyer will maintain an action for breach of contract, under s.51, in event of non-delivery. In order for s.51 to stick the seller must:
- Wrongfully neglect or refuse to deliver the goods to the Buyer
  - Buyer’s action is in damages for non-delivery
  - s51(2): Measure = ‘estimated loss directly and naturally resulting, in the ordinary course of events, from the seller’s breach of contract’
  - Consult market price if available: s51(3)

(Only) late delivery?

Victoria Laundry v Newman [1949

Launderers who purchased a large boiler for use in the dying their dying and laundry business. There was a delay in the boiler being delivered. That delay led to breach of contract.

But the problem for Victoria Laundry was that they lost a very lucrative contract with the ministry of supply.
So they argued that they lost a lot of expected profit which would have been a significant profit. The profit they would have made had the boiler not been delayed
Court said that this looked like a particularly lucrative contract, in the standpoint of the seller. Is it foreseeable that the buyer without any knowledge of what the buyer is up, that the buyer would be engaging into such lucrative contracts. And therefore the seller has a duty with respect to that.
The courts here said that the claimants could only recover the losses, which were in the reasonable contemplation of the parties, for this boiler. This included loss of profit, which could be expected from the lack of the use of the boiler b/c it was delayed. But the claimant could not recover so far as to recover for the loss of this lucrative contract; this is seen as an excessive profit in the eyes of the seller.
So in other words, it was said in the CoA, the seller only has to compensate the ordinary and not extraordinary loss of profit. So we are distinguishing there, particularly lucrative contracts as unusual and therefore exceptional in terms of the profits would have been won under them and limiting the damages to the profits in the reasonable contemplation of the parties.
Asquith LJ (CA):
- Distinguish ‘particularly...

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Remedies Notes

Updated Remedies Notes