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Contract: Remedies

The aim of damages and the measure of loss

  • 3 things to know
  • A2 Units 3 and 4

Overview

Expectation loss, reliance loss and nominal damages.

What you need to know

Answer each one before you reveal it.

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Key term

Why did the House of Lords refuse the cost of cure in Ruxley Electronics v Forsyth (1996)?

Key term

State the aim of an award of damages for breach of contract laid down in Robinson v Harman (1848).

Key term

What is expectation loss?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    State the aim of an award of damages for breach of contract laid down in Robinson v Harman (1848).

    Model answer

    Damages are intended to put the injured party, so far as money can do it, in the position they would have been in if the contract had been performed.

  2. 2

    What is expectation loss?

    Model answer

    Expectation loss is the value of the benefit the claimant would have received had the contract been performed, including profits that performance would have produced.

  3. 3

    What is reliance loss?

    Model answer

    Reliance loss is the wasted expenditure the claimant incurred in preparing for or performing the contract, which has been thrown away by the breach.

  4. 4

    What did Anglia Television v Reed (1972) allow the claimant to recover?

    Model answer

    The actor's withdrawal made the film impossible and the profits were impossible to estimate, so the company recovered the expenditure wasted in preparing the production, including sums spent before the contract was signed.

  5. 5

    May a claimant choose between expectation loss and reliance loss?

    Model answer

    A claimant may generally elect which basis to claim on but cannot recover both for the same loss, and cannot use the reliance measure to escape the consequences of having made a losing bargain.

  6. 6

    Distinguish the cost of cure measure from the difference in value measure.

    Model answer

    The cost of cure is what it would take to put the defective performance right, whereas the difference in value is the fall in worth of what was received compared with what was promised.

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