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Contract: Remedies

Evaluating the law of contractual remedies

  • 3 things to know
  • A2 Units 3 and 4

Overview

Criticism that damages rarely make an innocent party whole and case for keeping specific performance exceptional.

What you need to know

Answer each one before you reveal it.

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Key term

Assess the decision in Ruxley Electronics v Forsyth (1996).

Evaluation

Assess the limitation periods that apply to contract claims.

Evaluation

Explain the criticism that damages rarely make an innocent party whole.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Is the expectation measure the right aim for damages? Argue both ways.

    Model answer

    Protecting the expectation gives effect to the promise the claimant paid for and supports commercial planning, but it can award a windfall where the claimant would never have spent the money on the promised performance, as Ruxley shows.

  2. 2

    Explain the criticism that damages rarely make an innocent party whole.

    Model answer

    Irrecoverable legal costs, unquantifiable disruption, distress and loss of reputation all fall outside the ordinary measure, so a successful claimant is frequently left worse off than if the contract had simply been performed.

  3. 3

    Assess the decision in Ruxley Electronics v Forsyth (1996).

    Model answer

    Refusing a disproportionate cost of cure prevents damages becoming a punishment, and the award for loss of amenity fills the gap between two crude measures, but the outcome allows a builder to deliver less than was promised for a modest payment.

  4. 4

    Is the remoteness rule in Hadley v Baxendale (1854) still workable after The Achilleas (2008)?

    Model answer

    The two limbs remain the ordinary starting point and are easy to apply, but adding a question about assumption of responsibility introduces an extra and less predictable stage, so parties cannot be sure which analysis a court will use.

  5. 5

    Why does the law prefer certainty to full compensation in the remoteness rules?

    Model answer

    A contracting party needs to know its maximum exposure before agreeing a price, so limiting recovery to contemplated losses lets risk be priced and insured, at the cost of leaving some genuine losses uncompensated.

  6. 6

    Should damages for distress be more widely available in contract?

    Model answer

    Extending them would recognise that many contracts are made for reasons that are not commercial, but it would make every claim harder to value and would expose businesses to open ended liability for disappointment.

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AThe defendant owed the victim a duty of care and breached it.
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Pecuniary loss is financial and measurable.
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