Lecture 18

Remedies

Types of Remedies
Declaration
Specific Performance
Injunction
Action for Money due
Damages
Reduction of price (CRA 2015 ss 24, 44, 56)
Termination
Withholding performance
Restitution
Action for Money due

Breach of Contract

Two types of breaches: 1) Actual Breach 2) Anticipatory Breach

Think! What is the basis?

Damages

*Robinson v Harman (1848) 1 Ex Rep 850

The rule of the common law is, that were a party sustains a loss by reason of a breach of contract, he
is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the
contract had been performed.

Limitations on Damages

Causation

Mitigation

Remoteness

Contributory Negligence

What can be recovered

 a) Value of benefit conferred on D
b) Wasted expenditure
c) Loss of profit

Example

Contract to buy apples for 5000

Buyer pays in advance

Buyer must collect the apples (cost of 500)

Buyer shows up but Seller refuses to supply.

Substitute apples 7000 plus delivery 500

Result: 7500 Damages

Analysis by Fuller & Perdue:

Restitution Interest of 5000

Reliance Interest of 500

Expectation Interest of 2000

Reliance Interest

Anglia Television v Reed [1971] 3 All ER 690

Anglia Television hired Oliver Reed to play the leading role in a TV show. Reed then pulled out of the
deal and Anglia TV were unable to find anyone to replace Reed.

McRae v Commonwealth Disposals Commission [1951] HCA 79

The Commission invited tenders for the purchase of an oil tanker lying on the Journaund Reef which
was said to contain oil. McRae secured the tender and proceeded to the location at which the
commission had stated the vessel would be. It turned out that the vessel never existed.

C&P Haulage Co Ltd v Middleton [1983] EWCA Civ 5

Mr Middleton was allowed to occupy premises where he made improvements by fixing fixtures. The
contract provided that he would not, at the end of the contract, be allowed to remove the fixtures.
In breach of the contract they made Mr Middleton leave the premises early.

Ebrahim Dawood Ltd v Health Ltd [1961] 2 Lloyd's Rep

There was a contract for the sale of steel at 73,50 per ton which the buyer had paid but the seller
only delivered some of the steel. The buyer wanted a proportionate part of the price back. However,
by the date of delivery the price of steel had fallen to 70.

How to calculate damages

*Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8 i

Mr Forsyth ordered a swimming pool. He decided that a normal swimming pool was not sufficient
and that he wanted an extra deep pool. He therefore ordered a pool with a diving area depth of 7ft
6inch. By mistake, the contractors built the pool to the normal depth.

Chaplin v Hicks [1911] 2 KB 786

The claimant had entered into beauty contest and had made it to the final round. The defendant
failed to inform her until the last minute where the contest would take place which meant that she
could not make it.

Think! What is the court doing?

Causation

Same as in tort.

Remoteness

*Hadley v Baxendale [1854] EWHC J70

The mill owners had a broken crankshaft and they sent the crankshaft back to the producers. The
haulage company, in breach of contract, did not return the crankshaft in the promised time frame.

Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. [1949] 2 K.B 528.

The contract was for the sale of a second hand boiler. The boiler broke down and had to be
returned. The boiler had been purchased in order for Victoria Laundry to fulfil a very lucrative
government contract.

C Czarnikow Ltd v Koufos (The Heron II) [1967] UKHL 4

The contract was for the shipping of sugar to Basra. The shipment was late, by which time the price
of sugar had fallen.

You may want to compare these cases to other cases in Tort:

a) The Wagon Mound No.2 [1967] 1 AC 617

b) Parsons v Uttley Ingham [1978] QB 791

Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48

The ship was delayed in being returned which caused the owners of the vessel loss because they had
a very lucrative follow on charter.

Supershield Ltd v Siemens Building Technologies FE Ltd [2010] EWCA Civ 7

Might be limited to shipping cases?

Mitigation

Basic Principle:

Cannot recover for loss that could have been avoided by taking reasonable steps.

If C avoids the loss, they cannot recover, even if they did more than necessary under 1

If, in complying with 1, C incurs more loss, they can recover that loss.

Sale of Goods Act

S.50

(1)Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may
maintain an action against him for damages for non-acceptance.

(2)The measure of damages is the estimated loss directly and naturally resulting, in the ordinary
course of events, from the buyers breach of contract.

(3)Where there is an available market for the goods in question the measure of damages is prima
facie to be ascertained by the difference between the contract price and the market or current price
at the time or times when the goods ought to have been accepted or (if no time was fixed for
acceptance) at the time of the refusal to accept.

S.51

(1)Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may
maintain an action against the seller for damages for non-delivery.
(2)The measure of damages is the estimated loss directly and naturally resulting, in the ordinary
course of events, from the sellers breach of contract.

(3)Where there is an available market for the goods in question the measure of damages is prima
facie to be ascertained by the difference between the contract price and the market or current price
of the goods at the time or times when they ought to have been delivered or (if no time was fixed) at
the time of the refusal to deliver.

British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of

London Ltd [1912] AC 673

[] imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on
the breach, and debars him from claiming any part of the damage which is due to his neglect to take
such steps.

Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] UKHL 12

The charter included a clause that if war broke out between the US and Iraq, the contract would
come to an end. Nippon repudiated the contract in December 2001 (with 4 years left on the
charter). War broke out in March 2003.

Payzu v Saunders [1919] 2 KB 581

The contract was for the delivery of goods for a period of 9 months. Payzu was late in their payment
of the first instalment. Saunders refused to continue the original contract but offered to continue if
Payzu paid up front. Payzu rejected the offer and bought the goods at a higher price from a different
source.

Mitigation results in profit

3 Cases to look at:

Koch Marine Inc v D'Amica Societa Di Navigazione ARL (The Elena D'Amico) [1980] 1 Lloyd's
Rep 75
Fulton Shipping Inc of Panama v Globalia Business Travel SAU (formerly Travelplan SAU) of
Spain [2015] EWCA Civ 1299

Mitigation impact:

supply meets demand no reduction.

supply exceeds demand no reduction

 demand exceeds supply reduction

Think! Whats the point of mitigation?

Loss

Robinson v Harman (1848) 1 Ex Rep 850

The rule of the common law is, that were a party sustains a loss by reason of a breach of contract,
he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the
contract had been performed.

Surrey County Council and Mole District Council v Bredero Homes Ltd ChD ([1992] 3 All ER 302

The council entered into a contract with a home builder Bredero Homes. They were to build 72
houses and had also entered into a covenant not to build more than the 72 homes. They built 77.

See also: Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798

Account of Profits

Attorney General v Blake [2000] UKHL 45

Blake was a former member of MI6. He signed a contract that he would not disclose information
about his work. He later became a double agent and fled to the Soviet Union. From there he
published a book.