8. Remedies for Breach of Contract
Lecture 1- 12/02/19
Remedies for breach of contract can be divided into:
Contractually Stipulated Remedies (penalty, termination or arbitration clause)
Remedies available under the general law (default remedies)
(general law remedies) These can be divided into:
Self- help remedies, exercised without the court (retention, termination)
Judicial remedies, only be granted by the court
a. Are available as of right (action for an agreed sum) Monetary
b. In the discretion of the court (orders by the court to the party in breach, not
money, performance) Non-Monetary
Are remedies meant to give justice to the individuals in the parties or do they improve social
welfare for everyone?
Remedies try to discourage people from breaching a contract- fear
A breach of contract doesn’t mean a financial loss occurs, however there should still be a
remedy
Damages
Award of money by a court therefore “as of right” not “discretion”
Compensates for the loss the claimant suffered
Restitution for unjust enrichment
Award of damage is always meant to be compensatory, never punitive
Whiten v Pilot Insurance Co. 2002
Controversial because contract law is only meant to uphold a contract, not punish
Morris- Garner v One Step 2018
This outlined that common law damages for breach of contract are intended to
compensate he claimant, it cannot be awarded just to deprive the defendant of their
profits
Measure of Damages
Three ways of measuring the claimant’s loss:
Expectation Interest: puts aggrieved party in the position he would have been in if the
contract was carried out
Reliance Interest: puts aggrieved party in position as if he had not relied on the contract
Restitution Interest: The profit that the defendant has made as result of the breach
, Expectation Measure- basic rule
“Rule of the common law is that the claimant is put in the situation as if the contract had
been performed” – Robinson v Harman 1848 (full quote in handout)
Claimant’s loss can be calculated in 2 ways:
Cost of Cure
Diminution in Value
Lecture 2- 12/02/19
Ruxley v Forsyth 1996
Contractor built a swimming pool that was too shallow
Value was not affected
Customer claimed cost of new pool (£21,560)
Judge awarded £2500 for loss of amenity
Reliance Measure
Usually takes from as a waste of expenditure, money they spent on reliance that the
contract was going to be held up
If the claimant cannot prove the position he would be in after the contract then the reliance
measured is used.
Robinson v Harman However, if you enter into a bad buy and you will be better off with the
expenditure money rather than if the contract was upheld.
Exceptional Cases:
Claimant entered into a contract for non-financial reasons or cannot prove his expectation
position
Maritime v Mamola
Which party should provide the burden of proof if its impossible to show if the
profits will equal the expenditure?
Burden should be on the defendant to how that the expenditure wouldn’t have met
the profits.
CCC Films v Impact 1985
D gave C a licence to distribute 3 films in some countries for $12,000
D promised to insure the tapes and to send them to Munich by tracked delivery
D sent the tapes with no insurance and non-tracked post, didn’t arrive in Munich
C claimed for damages against D
Claimed the $12,000 because of wasted expenditure
They couldn’t prove the profits because they didn’t carry the task out so the court
allowed C to get $12,000 from D
Lecture 1- 12/02/19
Remedies for breach of contract can be divided into:
Contractually Stipulated Remedies (penalty, termination or arbitration clause)
Remedies available under the general law (default remedies)
(general law remedies) These can be divided into:
Self- help remedies, exercised without the court (retention, termination)
Judicial remedies, only be granted by the court
a. Are available as of right (action for an agreed sum) Monetary
b. In the discretion of the court (orders by the court to the party in breach, not
money, performance) Non-Monetary
Are remedies meant to give justice to the individuals in the parties or do they improve social
welfare for everyone?
Remedies try to discourage people from breaching a contract- fear
A breach of contract doesn’t mean a financial loss occurs, however there should still be a
remedy
Damages
Award of money by a court therefore “as of right” not “discretion”
Compensates for the loss the claimant suffered
Restitution for unjust enrichment
Award of damage is always meant to be compensatory, never punitive
Whiten v Pilot Insurance Co. 2002
Controversial because contract law is only meant to uphold a contract, not punish
Morris- Garner v One Step 2018
This outlined that common law damages for breach of contract are intended to
compensate he claimant, it cannot be awarded just to deprive the defendant of their
profits
Measure of Damages
Three ways of measuring the claimant’s loss:
Expectation Interest: puts aggrieved party in the position he would have been in if the
contract was carried out
Reliance Interest: puts aggrieved party in position as if he had not relied on the contract
Restitution Interest: The profit that the defendant has made as result of the breach
, Expectation Measure- basic rule
“Rule of the common law is that the claimant is put in the situation as if the contract had
been performed” – Robinson v Harman 1848 (full quote in handout)
Claimant’s loss can be calculated in 2 ways:
Cost of Cure
Diminution in Value
Lecture 2- 12/02/19
Ruxley v Forsyth 1996
Contractor built a swimming pool that was too shallow
Value was not affected
Customer claimed cost of new pool (£21,560)
Judge awarded £2500 for loss of amenity
Reliance Measure
Usually takes from as a waste of expenditure, money they spent on reliance that the
contract was going to be held up
If the claimant cannot prove the position he would be in after the contract then the reliance
measured is used.
Robinson v Harman However, if you enter into a bad buy and you will be better off with the
expenditure money rather than if the contract was upheld.
Exceptional Cases:
Claimant entered into a contract for non-financial reasons or cannot prove his expectation
position
Maritime v Mamola
Which party should provide the burden of proof if its impossible to show if the
profits will equal the expenditure?
Burden should be on the defendant to how that the expenditure wouldn’t have met
the profits.
CCC Films v Impact 1985
D gave C a licence to distribute 3 films in some countries for $12,000
D promised to insure the tapes and to send them to Munich by tracked delivery
D sent the tapes with no insurance and non-tracked post, didn’t arrive in Munich
C claimed for damages against D
Claimed the $12,000 because of wasted expenditure
They couldn’t prove the profits because they didn’t carry the task out so the court
allowed C to get $12,000 from D
