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Law Notes Contract Law Notes

Remedies Notes

Updated Remedies Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

From the AuthorContract 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 ...

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:

Table of Contents

I – Breach 2

Hochster v De La Tour (1853) 2 E & B 678 2

II – Termination 2

A/ Effect of termination 2

B/ Conditions of termiantion 2

1/ The levels of abstraction 2

*Hong Kong Fir Shipping v Kawasaki [1962] 2 QB 26 3

2/ The classification of terms 3

a/ By statute 3

*Sale of Goods Act 1979, ss 12-15A 3

The Hansa Nord [1976] QB 44 4

b/ By the parties 4

*Schuler v Wickman [1974] AC 235 4

c/ Classification by the courts 4

*Bunge Corp v Tradax [1981] 1 WLR 711 4

3/ THe formal conditions of termination 5

The Mihalis Angelos [1971] 1 QB 164 5

C/ Electing for affirmation instead 5

Commentary 6

|Fuller and Perdue, “The Reliance Interest in Contract Damages” (1936) 46 Yale LJ 52, 373 6

|NOTE Katz (1988) 7

|Ogus, Harris and Phillips, “Contract Remedies and the Consumer Surplus” (1979) 95 LQR 581 7

|Friedmann, “The Performance Interest in Contract Damages” (1995) 111 LQR 628 8

|Coote, “Contract Damages, Ruxley and the Performance Interest” [1997] CLJ 537 9

|Cunnington, “Should Punitive Damages be Part of the Judicial Arsenal in Contract Cases?” (2006) 26 Legal Studies 369 9

|Robertson “The Basis of the Remoteness Rule in Contract” (2008) 28 Legal Studies 172. 10

|Whittaker ‘Distinctive Features of the New Consumer Contract Law’ (2017) 133 LQR 47 esp. 57 – 66 10

|Bridge, "Mitigation of Damages in Contract...”, (1989) 105 L.Q.R. 398 12

I – Breach

  • Anticipatory:

    • Repudiation (expressly or impliedly evincing an intention, by words or conduct, not to perform all or part of the contract, before performance is due) or

    • Impossibility (disabling oneself from performing before performance is due, ex. By selling the subject matter of the contract)

  • Actual: failure to perform when performance is due

In case of repudiation:

  • If not express refusal, question is whether D’s acts or omissions would lead a reasonable person to conclude that D no longer intends to perform.

  • Breach occurs at time of repudiation (not time performance is due), so that (if sufficiently serious) it entitles C to terminate the contract immediately and claim for damages:

Hochster v De La Tour (1853) 2 E & B 678

  • Facts: D employed C to commence works for three months commencing in June, but repudiated in May. C could claim damages immediately and did not have to wait until June.

II – Termination

A/ Effect of termination
  • Discharges both parties from further performance of their primary obligations under the contract (though there are secondary obligations to pay monetary compensation for C’s loss) (Photo Production per Lord Diplock).

  • Accrued and other continuing obligations remain enforceable, as do clauses relating to post-termination situation (agreed damages clauses, exclusion clauses…).

  • Restitutionary claims are available (barring double recovery) – allowing C to sue for:

    • Restitution of money paid if there is total failure of consideration

    • Quantum meruit of reasonable value of goods or services supplied but not yet paid for under the contract1

B/ Conditions of termiantion

If breach is total C can obviously terminate, but if partial:

  • Breach of a condition = termination allowed

  • Breach of warranty = termination not allowed

1/ The levels of abstraction

To determine whether C can terminate, must determine whether C’s unfulfilled expectation is:

  • Level I = contingent or promissory obligation?

    • If contingent condition (condition precedent or subsequent) there is no question of breach so no termination (simply, the parties’ obligations don’t arise or are discharged)

    • If promissory condition (condition that one party has an obligation to bring about) go to Level II

  • Level II = dependent or independent obligation?

    • Independent condition (C’s promise is independent of D’s performance) C cannot terminate if D fails to perform2 (though D is still liable for the breach)

    • Dependent condition (each party’s obligation to perform is dependent on the other’s performance or willingness to perform) go to Level III

  • Level III = entire or divisible obligation?

    • Entire obligation (when D’s obligation must be completely performed before C is obliged to perform)3 C can terminate and does not need to perform, except:

      • If D substantially performed (Hoenig v Isaacs), C cannot withhold performance but must pay after deducting loss suffered from the incomplete or defective performance

      • D can claim restitution for the benefit conferred and accepted by C, or a quantum meruit (market value) if C had the opportunity to reject but accepted the benefit.

    • Divisible obligation breach gives C an action for damages, but not necessarily terminate (depending on the status of the term (go to Level IV)

  • Level IV = condition, warranty or innominate term?

    • Condition (an essential term at the formation of the contract) C can terminate and sue for damages for losses up to termination and loss of bargain

    • Warranty (a non-essential, subsidiary term at the formation of the contract) C cannot terminate and can only claim in damages up to the time of the action (not loss of the bargain because the contract continues)

    • Innominate term (if impossible to say at the time of formation how important the term is because the consequence of breach will vary in seriousness depending on the circumstances) whether C can terminate depends on the seriousness of the actual consequences of breach for C:

      • Whether the breach has/will deprive C of substantially the whole benefit it was intended he should obtain from the contract (Hong Kong Fir, Diplock LJ)

      • Bar is very high – the test is the same as that of frustration (Telford Homes, Lewison LJ)

*Hong Kong Fir Shipping v Kawasaki [1962] 2 QB 26

  • Facts: D chartered a ship to C for 24 months, but breached a term requiring the ship to be fitted for ordinary cargo service (seaworthiness term) by failing to provide competent personnel to maintain the ship. Thus the ship had many serious breakdowns and was only at sea for two out of the first seven months.

  • Held: the seaworthiness term was an innominate...

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