This website uses cookies to ensure you get the best experience on our website. Learn more

Law Notes Contract Law Notes

Common Law Remedies And Damages Notes

Updated Common Law Remedies And Damages Notes

Contract Law Notes

Contract Law

Approximately 65 pages

This class was co-taught by Dr. Ian Kerr, Canada Research Chair in Ethics, Law and Technology Dr. Anne Uteck at the University of Ottawa. Professor Kerr taught Part I of the course, and Professor Uteck completed Part II of the course pertinent to remedies....

The following is a more accessible plain text extract of the PDF sample above, taken from our Contract Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

TOPIC 5: COMMON LAW REMEDIES, DAMAGES

REMEDIES

Injunctions Specific Performance Damages

(equitable) (equitable)

Expectation

reliance

loss of income

intangible losses

One or more remedies can be available for breach of contract, but damages are most common (compensation for loss suffered as a result of the breach). PL rarely acquires specific performance, but rather the monetary value of X because the courts do not like to compel individuals. Types of damages include:

  1. compensatory

  2. punitive

  3. liquidated

  4. nominal

Depending on the issues at stake, there are various ways of calculating relief. Damages protect the following interests:

  1. Reliance Interest (BACKWARD): monetary compensation for expenses made towards performance of K. Puts PL into position before K was made, had she not entered contract. “Give me back what I’ve lost”

  2. Expectation Interest (FORWARD): monetary compensation intended to put PL in position she would have been in had K been performed (lost profit or substitution performance)

    1. Most common form of relief

    2. Monetary value PL expected to receive as benefit of contract

    3. Forward looking and places innocent party in position expected to be in after contract was properly performed

  3. Restitution interest: Restoration to the PL of a benefit conferred on DF to which she is not entitled.

Damages are too remote where (Hadley v Baxendale):

  1. The loss was not naturally occurring (DF cannot be liable for something he didn’t see coming)

    1. ASK: did a reasonable person contemplate that X loss would have occurred at the time of the K?

  2. Was the breach within the reasonable contemplation of both parties? (Were the risk of losses in special circumstances were communicated to the DF).

*Independently sufficient. All damages subject to the remoteness principle.

CASE RATIO FACTS REASONS

McRae v Commonwealth Disposals 1951 (Aust HC)

REFITTED VESSEL

I: Can the PL recover for wasted expenditure for Commission’s breach in not delivering?

D: appeal allowed; nominal damages $50

Even if expectation damages are difficult to calculate, reliance damages may be awarded.

- PL owned vessel being refitted

- contracted to have it upgraded for salvage work and bought equipment for this

- ship sailed from Sydney to X destination for delivery but sank

- PL claiming for equipment, reconditioning and damages for lost revenue

- expectation damages cannot be awarded because it is impossible to assess the loss of a non-existing ship

- the K did not guarantee the salvage operation would be successful even if the ship existed – any monetary value would be hopeless speculation

- claim for conditioning not allowable because it was done prior to K

- Purchaser bought a risk and wasn’t certain about profit (it was mere gossip)

CASE RATIO FACTS REASONS

Bowlay Logging Ltd v Domtar Ltd 1982 BCCA

BAD TIMBER BARGAIN

I: Was the trial judge accurate in awarding 250$ in nominal damages?

D: Yes

Reliance damages cannot be awarded where result of PL’s loss is a bad bargain. DF has onus to prove that only nominal damages should be awarded if losses of the breach were less than if K completed.

- B contracted with D for timber sale

- B supposed to cut and skid logs but D didn’t supply enough trucks for timber

- B sued for 124 K (to be in position had K never occurred)

- no evidence of loss indicating excessive costs that were spent in reliance of K

- trial judge did not err by not including start up costs

- expectation damages not awarded because K unprofitable

- loss was due to inefficient contract, not breach

Sunshine Vacation Villas Ltd v Governor and Company of Adventures of England Trading Into Hudson’s Bay 1984 BCCA

TRAVEL AGENTS + BAY

I: Was damage award at trial inaccurate?

D: appeal allowed in part; damages reduced to 195 K (amount of lost capital after restoring 19 K by trial judge)

Reliance damages cannot be coupled with expectation damages; only one can be recovered given that they are alternatives.

- Pl given license to operate travel agencies in 6 stores at the Bay (DF)

- PL discovered contracts would be terminated because existing licensees would be renewed so they sued for loss of capital (increase in line of credit – 80 K)

- the PL must elect to acquire reliance or expectation damages, but not both

- loss of capital/wasted expenditures (reliance) and loss of profit (expectation)

- here, expectation damages would be too speculative so loss of capital (reliance), should be recovered.

When choosing between expectation and reliance costs, look to whether the client has made a bad bargain. If yes, this may preclude PL from claiming reliance damages. Expectation damages are awarded for the most part. If they are impossible to award, we look to reliance interests. The interest being measured is our scope and there are two primary methods of assessment: expectation (puts party in the position they would be in had the contract been performed) and reliance (puts party in position they would have been in had K never been made, but cannot award if a bad bargain was made).

CASE RATIO FACTS REASONS

Chaplin v Hicks 1911 (CA England)

BEAUTY CONTEST

I: Can the PL recover for expectation damages?

D: appeal dismissed; yes

Difficulty in calculating expectation losses does not preclude expectation damages from being awarded.

- aspiring actress in a beauty contest as one of 50 finalists; photograph selected and was excluded from final 12 who received acting contracts because she did not receive a letter from the DF for an interview

- PL sued for loss of chance/opportunity)

- just because contingencies are difficult to calculate, that does not mean they cannot be awarded

- loss of chance to win considered in damages

- the prize has a monetary value which should be the amount she receives in damages

This case seems to contradict McRae on the notion of expectation damages that are incalculable. At first glance, it appears that there is a speculatory element involved. In...

Buy the full version of these notes or essay plans and more in our Contract Law Notes.