Remedies for Breach of Contract
Read davies first
Remedies for breach- depending on type of breach
I. Compensatory remedies: Monetary compensation
II. Non-compensatory remedies
I) Compensatory remedies- damages
Most common legal remedy in contract
Damages= payment of money to compensate for the loss the claimant has suffered
Purpose is to place is to place the injured party in the position they would have been
in had the contract been performed
Two types-
A) Financial losses
Three requirements: causation, remoteness and mitigation in order to claim
financial compensation
o Two types of financial losses-
o I) Expectation Loss= loss of profits
o Calculated by reference to the profits lost due to the contract not being
performed as expected (e.g. any loss of profits claimed back)
o Robinson v Harman: Parke B stated that “the rule of the common law is,
that where a party sustains loss by reason of breach of contract, he is, so far
as money can do it to be placed in the same situation, with respect to
damages, as if the contract had been performed (how to calculate
damages= has to be in same position as if contract had been performed)”
o II) Reliance Loss= expenditure loss
o Difficult to quantify position claimant lost if contract would’ve been
performed; possible to recover damages/expenses based on reliance of
contract
o Example: If a person relies on another’s promise to deliver; then acting or
spending money according to it, which results in financial loss
o Angelia Television Ltd v Reed (1971):
o The parties entered into a contract whereby the defendant was engaged to
play the leading role in a television play produced by the claimant company.
However, the defendant terminated the contract and since Anglia Television
were unable to find a replacement, the play had to be abandoned. The
claimant incurred expenses amounting to £2,750.
o Held: where a party incurs expenses as a result of a contract being
abandoned, they are entitled to claim reliance loss (Anglia relied on Reed’s
promise to play the role and spent accordingly). Thus, Anglia Television were
able to recover their expenses from the defendant.
o Establishing Liability for Financial Loss- Causation:
o Claimant has to prove that loss caused by def. breach of obligation was too
remote (how far removed) from the breach
Read davies first
Remedies for breach- depending on type of breach
I. Compensatory remedies: Monetary compensation
II. Non-compensatory remedies
I) Compensatory remedies- damages
Most common legal remedy in contract
Damages= payment of money to compensate for the loss the claimant has suffered
Purpose is to place is to place the injured party in the position they would have been
in had the contract been performed
Two types-
A) Financial losses
Three requirements: causation, remoteness and mitigation in order to claim
financial compensation
o Two types of financial losses-
o I) Expectation Loss= loss of profits
o Calculated by reference to the profits lost due to the contract not being
performed as expected (e.g. any loss of profits claimed back)
o Robinson v Harman: Parke B stated that “the rule of the common law is,
that where a party sustains loss by reason of breach of contract, he is, so far
as money can do it to be placed in the same situation, with respect to
damages, as if the contract had been performed (how to calculate
damages= has to be in same position as if contract had been performed)”
o II) Reliance Loss= expenditure loss
o Difficult to quantify position claimant lost if contract would’ve been
performed; possible to recover damages/expenses based on reliance of
contract
o Example: If a person relies on another’s promise to deliver; then acting or
spending money according to it, which results in financial loss
o Angelia Television Ltd v Reed (1971):
o The parties entered into a contract whereby the defendant was engaged to
play the leading role in a television play produced by the claimant company.
However, the defendant terminated the contract and since Anglia Television
were unable to find a replacement, the play had to be abandoned. The
claimant incurred expenses amounting to £2,750.
o Held: where a party incurs expenses as a result of a contract being
abandoned, they are entitled to claim reliance loss (Anglia relied on Reed’s
promise to play the role and spent accordingly). Thus, Anglia Television were
able to recover their expenses from the defendant.
o Establishing Liability for Financial Loss- Causation:
o Claimant has to prove that loss caused by def. breach of obligation was too
remote (how far removed) from the breach
