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Law Notes Contract Law Notes

Breach And Damages Notes

Updated Breach And Damages Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Contract Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest...

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

Breach & Damages


  • A party w/out lawful excuse:

  1. fails/refuses to perform

  2. performs defectively

  3. incapacitates himself from performing

  • to be established on balance of probabilities

  • Whether there’s breach depends on precise construction of terms (no universal principle displacing analysis!)

  • burden of proof on the party claiming breach + fault isn’t always necessary BUT

  • it’s not repudiation for a party to put forward his genuine interpretation of what contract requires

  • where he performs in a manner inconsistent w/terms, the fact that he acted in good faith isn’t a defence

  • Consequences of breach

  • No automatic end to the contractgives innocent partyoptions:

  • Depends on facts but 3 principal consequences:

  1. recover damages for loss suffered b/c of breach

  • unless liability for breach excluded –s3 UCTA

  • available regardless of whether a condition, warranty or innominate term

  1. party in breach may be unable to enforce innocent party’s obligations under contract

  • independent obligations = doesn’t entitle C to abandon performance b/c of breach

  • dependent obligations = C must generally be ready to perform b/f he can maintain action

  1. may entitle the innocent party to terminate further performance

  1. breach of warranty –no termination but damages

  2. breach of condition – termination

  • breach doesn’t have to produce serious consequences which go to the root of the contract" or be "fundamental” – enough that parties classified it as condition & intended it to be it + used the word in technical sense ((The MihalisAngelos)

  1. breach of innominate term- if consequences are sufficiently serious, C can terminate

  • what matters is seriousness of breach, not necessarily terminology Hong Kong Shipping v Kawasaki [1962]

  • Prospective nature of breach

  • Contract ‘rescinded for breach’ = set aside prospectively (Johnson v Agnew; Photo Production) term intended to regulate consequences must be taken into consideration by court

  • C has a right of election: terminate or affirm

  • Ccan chooseto:

  1. terminate & claim damages = accept repudiation + notify the party in breach; effective acceptance

  1. no particular form

  2. clearly & unequivocally conveys that C is treating contract as having been breached

  3. C doesn’t have to do it personally/through agent – sufficient that it comes to D’sattn

  4. C doesn’t have to give the real/valid reason so as long as terms entitle him to terminate – can do so regardless of motive

  • C who accepts further performance after breach may be held to have affirmed it& will only be able to claim damages, unless waives it (total waiver)

  • once he exercised his right of election, decision can’t be revoked

  1. affirm & claim damages contract is in force + both parties bound + right to terminate later, if breach continues

  • don’t have to elect immediately - while deciding can maintain the contract + reserve right to treat it as repudiated if breach continues

  • notionally, free to elect but might be restricted by requirement to take reasonable steps to mitigate his loss but C can’t recover full extent if didn’t take reasonable steps to mitigate his loss = not required to take any steps which a reasonable & prudent man wouldn’t ordinarily take in the course of business(British Westinghouse)

  • Anticipatory Breach

  • Definition:one party informs anotherb/f time fixed for performance that he won’t perform = entitles C to termination +claim for damages w/out having to wait for date when performance’s due (Hochester v De La Tour).

  • Why implied term that neither party will, w/out just cause, repudiate b/f time fixed for performance

  • Ccan elect to:

  1. accept breach + terminate immediately + claim damages must:

  1. give notice to D

  2. not act inconsistently w/his decision

  1. affirm + demand performance + accept breach if D continues not performing

  1. affirmation won’t prevent C from accepting breach if D doesn’t subsequently perform

  2. C, in addition to affirming, continue w/performance even though he knows they aren’t wanted

  • 2 qualifications

  1. where C can’t continue w/out D’s cooperation (dependent obligations) he must accept breach

  2. if C has no legitimate interest (financial/other) in performance over damages, he shouldn’t be allowed to saddle D w/additional burden w/no benefit to himself (Lord Reid White and Carter)

  • unreasonable behaviour v wholly unreasonable behaviour C must have acted wholly unreasonably for court to refuse to allow him to continue w/performance & claim the contract price.


  • No punitive damages in contract (only tort)

  • General rule: C can choose b/w measures of compensation, subject to exceptions:

  1. can’t seek reliance loss in attempt to escape from consequences of bad bargain which isn’t allowed (C&P Paulage Co)

  2. can either claim loss of profits OR wasted expenditure, not both (Anglia TV v Reed)

  3. D can seek to prove contract was loss making as a defence (i.e. expenditure wouldn’t have been recouped anw) (Omak Maritime Ltd v Mamola Challenger Shipping Co)

  • Types

  1. Performance (expectation) Interest

  • Put C in a position as if contract had been performed (Robinson v Harman)

  • Methods used to fulfil it

  • Cost of cure

  • Diminution in value

  • Loss of amenity(Ruxley v Forsyth –enjoyment OK) – even where no economic loss

  • Date for assessment is usually @ time of breach BUT can be set later to calculate compensation accurately (The Golden Victory); e.g. future events

  1. Reliance Interest

  • Beneficial where:

  1. C can’t prove what his consequential loss would have been (i.e. quantify w/any degree of precision) (McRae v Commonwealth Disposals)

  • But courts are v. reluctant where assessment is hard(Chaplin v Hicks – beauty competition, 25% chance win)

  1. C seeks to recover damages of pre-contractual expenditure can recover, provided expenditure was:

  1. within reasonable contemplation of the parties

  2. likely to be wasted with D’s breach

  • Can’t claim reliance interest where:

  1. C has simply entered into a bad bargain

  2. it would reverse the contractual allocation of risk (...

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