Damages and other contract remedies

Overview

Recall questions on compensatory damages, expectation and reliance loss, remoteness, causation and mitigation, liquidated damages and penalties, specific performance and injunctions, and consumer remedies under the Consumer Rights Act 2015.

What you need to know

Answer each one before you reveal it.

Questions from this subtopic

Each one with the model answer underneath.

1. 1

   What is the primary remedy for breach of contract?

   Model answer

   Damages, a common law remedy available as of right to compensate the innocent party for their loss.

2. 2

   What is the aim of compensatory damages in contract?

   Model answer

   To put the innocent party, so far as money can, in the position they would have been in had the contract been properly performed (Robinson v Harman 1848).

3. 3

   What is the difference between expectation loss and reliance loss?

   Model answer

   Expectation loss compensates the claimant's loss of bargain (the benefit expected from performance); reliance loss compensates wasted expenditure incurred in reliance on the contract.

4. 4

   What is the test for remoteness of damage in contract?

   Model answer

   Losses are recoverable if they arise naturally from the breach, or were within the reasonable contemplation of both parties when the contract was made (Hadley v Baxendale 1854).

5. 5

   When can a claimant recover unusual or special losses?

   Model answer

   Where the special circumstances giving rise to the loss were made known to the defendant at the time of contracting (Victoria Laundry v Newman Industries 1949).

6. 6

   What does the duty to mitigate require of the innocent party?

   Model answer

   To take reasonable steps to minimise their loss; they cannot recover for losses that reasonable mitigation would have avoided.

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