REMEDIESIntroduction A lossor damage in contract givesrise to remedies. Contractual remedies are numerous and varied. They can be broadly divided Into Legal remedies and Equitable remedies. » Legal Remedies are those awarded by the court in exercise of their civil law jurisdiction. Many sub-categories of legal remedies are monetary in nature. > Equitable remedies are those which ate awarded by the court in equity to prevent miscarriage of justice and provide a more flexible rellef in cases where legal remedies are not the appropriate answer.Types of Remedies > The most important legal remedy is Damages. Yes, i dictionary meaning of damage whichis physical harm, is different from the > In contract law "Damages" (that’s right, with "'s” In the end) has a special meaning, It means the amount of money payable by way of compensation for an injury or loss. > The important Equitable remedies are: A) Specitic Pertormance 5) Injunction Restitution { includes Unjust Enrichment and Quantum Meruit)> Al 8 > a) b) °) A party will be entitled to the remedy of damages where the other party has: Breached a term of the contract: A party falls to fulfil their contractual obligations. Repudioted the contract: A party refuses or renounces their contractual ‘obligations. Damages may be of different kinds. The primary forms of damages cre: Nominal damages Expectation damages Reliance damagesNominal Damages > Where no loss Is established by a party claiming a breach or repudiation, the court will, generally, award nominal damages. It Is a sum of money awarded to recognise infringement of the non-breaching or non-repudiating party's legal rights but without compensating any actual loss, since, there isn't any loss fo compensate. >» Nominal damages are not awarded frequently in contract law. For example, Arjun entered into a contract to construct a house. He completes construction 3 hours after the given deadline. There was no actual loss to the owner by the Construction completing 3 hours late. The owner commenced legal action against Arun for breach of contract. In court, the judge asked the owner: "What is your loss? Did you lose any profits or anything else?” The owner replied: “No, | didn't incur any actual loss but Arjun breached the contract. | should get some relief.” The court awarded Rs. 1 as nominal damages for the breach.Expectation Damages > Isto compensate a contractval party for @ potential benefit that could have been gained had a breach ‘or reputation not taken place by the other party. > There are, primarily. wometheds to calculate expectation damages. However, there could be more depending on the industry, intent of parfies, nature of the contract and camplexily of the matter. Method 1: Sally agrees fo supply 50 kgs of premium oranges to Joe. A clause in the contract stated, in case, oranges did not meet the requred quality. compensation would be determined by market rate of thi ‘oranges at the time of delivery. The oranges delivered were not of premium quality promised in the contract, At the fime of delivery. the market rate of the premium oranges had increased to Rs. 200, The value of oranges delivered was Rs. 150. Damages {compensation} payable to Joe is Rs. 50. Why: The court will say, Joe was enfitled te oranges worth Rs. 200 and he lost that benef by setting for oranges worlh Rs, 150. The lass is the difference beween whal he expected to receive and what he compromised wih. This values Rs. 50. Method 2: Sally agrees to supply $0 kas of apples fo Joe on 21" April 2020 for Rs. 100. Sally fails to delver the apples that day. Joe needed apples urgently and he obtained the apples from Jemy at Rs. 200 (double the price). Damages payable would be the difference between the amount paid to Jeny and the amount payable fo Sally. Damages i Rs. 100. Why: The court wil say, the apples were delivered on fime, the amount Payable was Rs. 100, given Joe had to procure apples at double the cost, he is aut of packet by Rs. 100. His Toss's Rs, 100.Reliance Damages >» Generally, found in service contracts. >» A person who sutfers an economic loss by acting in reliance ot faith of the other party who failed to pertorm their obligation under the contract can claim reliance damages. >» For example, QuickFxSubmaine Ltd was engaged by the Government to undertake @ savage (removing the submarine wreckage] operation of a submarine in the Indian Gcean. In reliance of the representation, QuickFixSubmaine Ltd, prepares an iron framework to remove the wreckage at a considerable expense before setting out to find the wreckage. The wreckage could not be found at the coordinates provided by the Government. QuickFixSubmaine Ltd claimed reliance damages for Preparing the iron framework. The court accepted the claim and awarded the amount spent for preparing the iron framework as damages.Pecuniary and Non-Pecuniary Damages » Where damages can be quantified by a monetary sum, the damages are pecuniary >» For example, damages for failure to deliver SOkgs of apple at Rs. 100. The sale invoice can be used as evidence of pecuniary loss. » Where damages cannot be quantified by a monetary sum, damages are non- pecuniary. For example, damages for emotional distress > The court Is required to compute damages on a fair and reasonable basis in non- pecuniary damages.What factors do we consider while claiming damages? > For damages to be claimable for breach of contract or repudiation. a party needs to prove: > The damages are caused by breach or repudiation of the other party: (Causation) > The chain of causation was not broken by an intervening > The damages are not too remote: |Remoteness} > The non-breaching er nan-tepudiating party should not have failed to mitigate their damages. They should have taken reasonable steps 1o prevent the loss from escalating. (Mitigation > There are three limitations to claiming damages. > These are causation, remoteness and mitigation. > They are limitations because they restrict the availabilty of damages claimable. > Contract law places reasonable. mits around the amount claimed as damages to ensure itis far gna just fo Bolh partes. Twi require the claimont to prove los sulted os a resuit of the breach through evidence> The test for causation in contract is different from tort. In tort, the “but for” test is used but in contract, we use the “common sense” approach. The reason Is that application of the “out for” complicates the decision to hold a party responsible for a specific loss > For example, Jerry was required to supply Sally with 20,000 electric bulbs. Jerry fails to supply the electric bulbs. Sally visits Jerry's factory to inspect what the problem is. She falls off the ladder while inspecting the manufacturing pant. The “ut for” test suggests, “but for” the {allure to supply, Sally would not have visited Jemy’s factory. > The “common sense" approach would find, it was not expected at the time of contract formation that Sally would visit the factory and she would fall off the ladder, merely, because Jerty failed to supply electric bulbs.Test for Measure of Contractual Damages > The general principle for measuring quantum Is Icld in the English case of Robinson v. Harman (1848) | Ex 850. Parke 6 articulated the principle as: ‘Where a party sustains a loss by reason of breach of contract, he fs, so far as money can do i, fo be placed in the same position situation with respect fo damages as if the coniracthas been performed. The idea is to place the party in a situation as though the contract had been performed. > Example: Anglia Television Ltd. v. Reed [1971] 3 All ER 690. In particular, the case deals with reliance damages. Image: Robert Reed (Centrewith a brown tie) Image Credit: Encyclopedia Britannica [oniine)Anglia Television Ltd. v. Reed [1971] 3 All ER 690 » Robert Reed, an American actor agreed to play the leading role in the fllm, The Man in the Wood, made by Anglia Television Lt. > There was some muddle In the dotes ond Robert Reed was booked for another engagement in the United States on the same dates he had agreed to shoot in England >» Robert Reed repudiated (renounced or refused) the contract. >» Anglia Television Ltd claimed damages as wasted expenditure for the preparation of the fliminstead of loss of profits.Decision (Court of Appeal): Denning L.J. >» Expenditure incured before the contract is claimable as damages, provide, it was reasonably contemplated by the parties as, ikely, to have been wasted if the contract was broken. > Applying the principle, at the time of entering the contract, Robert Reed must have known that expenditure had been undertaken for preparation such as director fees. He must have contemplated or it can be reasonably imputed to him, that it he cancelled the contract, the expenditure would be waste, whether incumed before or after the contract. » Robert Reed was liable to pay all the wasted expenditure, including, the expenditure before entering the contract.Remoteness » The party should be liable to the extent that can be reasonably said to be attributable to the breach. > The test for whether a loss Is remote has been provided by Alderman B In the English case of Hadley v. Baxendale (1854) 9 Exch 341. Generally, the Issue of remoteness arises in claims for loss of profits. Most cases we deal In class will require determination of whether a breaching or repudiating party can be held liable to pay damages for loss of profits. >» Another notable point is: many cases in the syllabus for remoteness are fromthe shipping industry.Hadley v. Baxendale (1854) 9 Exch 341 » Hadley owned and operated City Steam-Mills in Gloucester which used ai sleam-engine fo grind com into cornmeal (roughly ground com). > The crankshaft of the steammengine broke and required repair > The crankshaft had to be delivered from the Mill located in Gloucester to W. Joyce & Co, the repairers in Greenwich » The repairers sought to use the broken crankshaft as a model fo make a new crankshaft, > Hadley engaged Baxendale, a common camer of goods to deliver the broken crankshaff from Gloucester lo Greenwich » Baxendale delivered the crankshait after 7 days, as a result, the crankshaft was retumed by W. Joyce & Co after 5 days from the general timeframe for repairing the crankshaft.Decision (Alderson B): There was a delay by Baxendale in delivering the broken crankshaft, This was @ breach in contract. The br Hadley did not receive the new crankshaft untl several days resulting in a delay in operating the ml Hadley, lost profits he would havereceived.f the mil had been oper hgaverise to damages (monetary compensation for the loss), ting The tes! forremoteness: 1@ of them has broken, the dex [mb 13] “Where two parties have made a contract which Which the oiher parly dught fo receive In respect of such breach of contrac} should be such ox may Jaity and reczonaely be considered either arting naturaly, Le. cecording ta ihe usual Course of tinas, from such breach oF contrac! ise.” [Umb 1 deak with damages naturaly flowing from the breach of generalciamages] > [Limp 2: ...r such as mayreasonably be supposed ofthe time they: made the contract. as ihe probable result 0 special damages. ages 0 have been in the contemplation of both partes, {he breach of f" [mb 3 dea wiDecision (Alderson B): > Consdered the cose ta fa within the ambit o social ercumstonces fimb 2} and not those natal ara nthe > fo limb 2]: If there. a6 specially ccumstances under which the contiact ond the had been communicated by Hovey fo Baxendale, ihe cycumstances woud have besn within 1 ath parties the semage: testing rom a breach cauls, hen, fe said $0, oreinany flow fem the rae" Under special orcurstanoes known ond communicated, > | ckcumstonces wore wholly unkna.n to the breaching party [saxendale), he could only be supposed Jo have contemelated tne loss srse, ly, n'a reat multitude of Gases [ordnaty cases). The meant, te loss Wiotial Be tnaite fh Breach of Contract > the special croumstan known to both parties, they would have incorporated special tems on somagesin ins contract 10.3 romequences of breaching those fem, " * There was ne way for Boxendole to have known the broken crankshaft was to be used as @ model for ¢ Sronesht > It wos reasonable to contemplate that Hodley may have @ replacement shaft for the mil and only sought fo send the Broken one fee ropar. > Cariage of a broken shalt for use as a model for @ new one ore special cicumstances and should have bs Commanicated te Baxendale, Haley sought fo claim loss of pratis for enning the mil due to delay in deliven