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Remedies for Breach

Remedies

Common law

Equitable remedies

Damages

Recission

Restitution

Specific Performance

Injunction

Quantum meruit

Anton Piller order

Damages

Main purpose of damages is to enable the innocent party to receive MONETARY COMPENSATION. Damages are a common law remedy and awarded as of right. They are calculated on the basis of looking at what the position of the plaintiff would have been if the contract had been properly performed. They are assessed on a once and for all basis at the date of breach.

Damages

Steps in determining an award of damages

Damages

Causation

Is there a causal connection between the breach and the loss suffered?

The plaintiff must show that the breach of contract by the defendant was the cause of the loss.
The general test used by the courts is the same as that used in assessing damages in general the but for test
CASE: Alexander v Cambridge Credit Corporation Ltd (in rec) (1987)

Note the but for test is not an exclusive test, e.g. there is the common sense test, which was approved in:
CASE: Chappel v Hart (1998)

Damages

Remoteness

The loss or injury must not be too remote, i.e. losses must be reasonably related to the contract.
Hadley v Baxendale (1854) indicates 2 types of loss are recoverable: loss arising from the breach in the usual or normal course of things; and loss arising from special or exceptional circumstances where it can be shown that the defendant had actual knowledge of the plaintiffs needs
CASE: Victoria Laundry v Newman Industries [1949) CASE: Commonwealth of Australia v Amann Aviation Pty Ltd (1991)

Damages

Damages

The aim of damages is to put the injured party back as close to the position they would have been in had the breach never occurred. Damages are recoverable for provable or economic loss as well as: expectation losses reliance losses
CASE: Commonwealth of Australia v Amann Aviation Pty Ltd (1991)

distress and disappointment


CASE: Jarvis v Swan Tours [1972] CASE: Jackson v Horizon Holidays [1975] CASE: Baltic Shipping Co Ltd v Dillon (1993)

physical injury
CASE: Grant v Australian Knitting Mills Ltd [1936]

Difficulty in calculation is not a ground for disallowing a claim


CASE: Howe v Teefy (1927)

Damages

Mitigation of damages

The plaintiff must take reasonable steps to minimise or mitigate their loss. Failure to do so can result in a reduction of damages.
CASE: Payzu v Saunders [1919]

Mitigation is a question of fact and the onus of proof is on the defendant.

Damages
Damages

Nominal
(No actual loss suffered)

Ordinary (Usual remedy)

Exemplary (punitive)

General

Special

Types of Damages

The type of damages that will be awarded will be determined by the seriousness of the breach and whether the contract has specified the amount of damages to be paid in the event of breach:

nominal damages plaintiffs legal rights have been infringed but they have suffered no actual loss
CASE: Charter v Sullivan [1957]

ordinary damages loss suffered by the plaintiff as a result of the breach and can be either general or special damages exemplary damages punitive and may be awarded for non-economic loss
CASE: Jackson v Horizon Holidays [1975]

Types of Damages

Liquidated damages Awarded where a plaintiff is able to sue for a specified sum, which must be a genuine or bona fide pre-estimate of the actual loss that will flow from the breach. Unliquidated damages Awarded where an injured party has no fixed sum in mind and leaves the court to decide the amount. Penalty A threat to ensure performance and not enforceable because they are not a genuine pre-estimate of the damage that will result from the breach
CASE: Dunlop Pneumatic Tyre Co v New Garage and Motor Co Ltd [1915]

Equitable Remedies
Equitable Remedies

Recission

Restitution

Specific Performance

Injunction

Quantum meruit

Anton Piller Order

These are discretionary remedies at equity and are only granted where damages are not an adequate remedy.

Equitable Remedies

Rescission

A right available to an injured party. Does not require the intervention of the court. Entitles the injured party to set the contract aside and is only available for breach of a condition. Substantial restoration must be possible as the injured party is restored to their pre-contractual position. The right to rescission is lost if the injured party: continues with the transaction; fails to act or act within a reasonable time; or if an innocent third party acquires an interest in the subject matter.

Equitable Remedies

Restitution

Is based on the concept of unjust enrichment and sometimes referred to as quasi-contract.

The plaintiff must establish: the benefit was at the plaintiffs expense; it would be unjust to allow the defendant to keep that benefit or enrichment; and
CASE: Pavey & Matthews Pty Ltd v Paul (1987)

the defendant must obtain a benefit or enrichment; the defendant has no defences to rely upon.

Equitable Remedies

Restitution can be used if: the defendant has received a sum of money from the plaintiff and there has been a total failure of consideration or a mistake of fact;
CASE: McCormack v Commonwealth (1984)

under a mistake of law;


CASE: David Securities Pty Ltd v Commonwealth Bank (1992)

under duress or compulsion.

Restitution makes use of the doctrine of quantum meruit


CASE: Pavey & Matthews Pty Ltd v Paul (1987) CASE: Planche v Colburn (1831) CASE: Sumpter v Hedges [1898]

Equitable Remedies

Specific Performance

A remedy compelling performance. It is only granted at the courts discretion where the court can supervise the implementation of the contract. It is not available in contracts involving personal services because the court is unable to adequately supervise the task CASE: Ryan v Mutual Tontine Westminster Chambers Assoc [1893]

Equitable Remedies

Injunction

It is a restraining order which prevents a person from breaking a contract. It is a discretionary remedy and aims at enforcing negative promises. It normally cannot be used where it would achieve the same result as specific performance.
CASE: Lumley v Wagner (1852)

Equitable Remedies

Mareva Injunction

Prevents the defendant from removing assets from the courts jurisdiction.
CASE: Mareva Compania Naviera SA v International Bulk Carriers SA, The Mareva [1975]

Anton Piller Order

Prevents a defendant from disposing of any evidence before trial.


CASE: Anton Piller KG v Manufacturing Processes Ltd [1976]

Quantum Meruit

Arises where there has been part-performance, and only where it can be implied that payment would be made.

Statutes of Limitations

An injured party can loose their right to an action unless they act within a certain time period.
The statutes of limitations of the States and Territories determine the time limits within which an injured party must take action. Prevents actions remaining open indefinitely.