Contract Law Essay Question on Breach:

When are damages for non-pecuniary loss recoverable following a breach of

contract? Should this availability be expanded?

Answer:
The above-mentioned statement is related to breach of a contract. More specifically it requires
a discussion on when non-pecuniary losses will be recoverable if a breach occurs in the
contract. Moreover, we will discuss whether this availability needs to be expanded or not.
There are two types of remedies available for a breach of the contract. Damages and recission
are the two remedies available for the injured party. Recission, specific performance,
injunction, and rectification come under equitable remedies. The basis meaning of recission is
to rescind the contract means to put the party in a condition where they would have been had
the breach not occurred it will put a party in a pre-contract position. The remedy of damages
falls under common law. Under the remedy of damages, the injured parties will be rewarded
with money to that such a will fulfill their losses. If the innocent party is awarded damages then
it be called as post-contractual position means that innocent party will be put in a position
where he would have been had the breach not occurred. The remedy of damages is available
and will be rendered if the innocent party can prove that there has been a breach in the
contract. If a breach will occur in the contract then the innocent party might suffer pecuniary
loss, such as, disappointment, mental distress, disappointment, hurtful feeling, negative feeling,
or humiliation. Traditionally, these losses had no effect or value but some cases paved the way
for these types of losses. Now the rule has been relaxed and it is stated that when the main aim
of the contract is to relax one’s mind, take pleasure, or peace of mind then the innocent party
should be awarded damages for mental distress.

There was a general rule that there will be no claim for non-pecuniary loss. Damages for mental
distress were not available in the commercial contract (Addis v Gramphone 1909). However,
this general rule was changed in the case of Jarvis v Swan tours, where it was held by the Court
that “when one party has entered into a contract for a specific purpose of the provision of
enjoyment, or entertainment, then damages may be awarded for the disappointment,
frustration, upset, and distress caused by a breach of the contract, if it failed to provide the
enjoyment or entertainment.” This case opened the concept of non-pecuniary. We have
another case of Watts v Morrow 1991, where this concept was further expanded. In this case,
Bingham LJ said, “a contract breaker is not liable for any distress, frustration, anxiety,
displeasure, vexation, tension, or aggravation which his breach of contract may cause to the
innocent party. But the rule is not absolute or strict. Where the very of object of the contract is
to provide pleasure, relaxation, peace of mind, or freedom from molestation, then damages will
be awarded, if the fruit of the contract is not provided or if the result is procured instead.”

By looking on these cases, it can be said that the old rule has been relaxed to some extent. It is
up to the courts to measure that whether the innocent party should be given non-pecuniary
loss or not. Courts cannot make this rule very flexible because then every party will demand
damages for non-pecuniary losses and they all would say the same that ‘we have suffered
mental distress’. In order to measure the merits for the reward, the Court would see whether
the foundation of the contract was only for mental relaxation or the root of the contract was
different than mental relaxation and peace. There was another case of Jackson v Horizon
holidays which further broadened the concept of non-financial loss to certain extent and losses
were awarded if the idea behind the contract was to have pleasure and recreation.

In the case of Ruxley electronics v Forsyth, a claimant demanded non-pecuniary loss which was
21,540 pounds. It was a huge claim and they said that they have suffered from mental distress
because ‘we wanted a 7.5 feet pool and the contractors have built 6 feet deep pool’. Hence, the
contractors should reconstruct the pool which will cost 21,540 pounds. The Court held that ‘the
loss they are demanding is disproportionate and hence we cannot allow that however, the
injured party will be rendered loss of amenity which was 250 pounds to satisfy their mental
element’. Loss of amenity is up to the discretion of the judge and can never be measured. By
looking, at this case it can be said that the element of mental recreation was broadened in this
case, to very little extent but it did expanded the concept of non-pecuniary loss.

We have another important case of Farley v Skinner which really broadened the rule of non-
pecuniary losses. The scope of expectations to this general rule and the law of contract does
not compensate for mere disappointment or annoyance, it is now, more than that. In this case
a claimant asked a property surveyor to tell him the rate of the property and tell him that
whether there will be any flights roaming above his property because the airport is near to the
property which will disturb his peace of mind. The property surveyor assured him that the noise
of any flight will not affect his peace of mind because the flights will not be roaming above his
property. On his assurance, the claimant entered into this contract and when he started living
in the bungalow. He met with the nuisance of the noise of flights and went into the court to
demand non-pecuniary loss. Now, as facts of the case suggest that the foundation of the
contract was not wholly for recreation but recreation was just a term in the contract and the
root of the contract was to purchase the house but court held that ‘even if one term in the
contract is related to peace of mind in the contract the other party will be held responsible and
the claimant might get non-financial loss’. This is how these cases have broadened the concept
of non-pecuniary losses with the passage of time.
In putting all the things in a nutshell, it can be said that now the concept of non-pecuniary
losses have been broadened. This concept should be broadened and non-pecuniary losses
should be given to the injured parties depending what sort of contract is. It has been expanded
and common law has made sure to give proper heed to this concept. The courts are doing quite
well in regard to non-pecuniary losses.