1. Law of Contract Remedies for breach Damages & equitable remedies

2. Common law Damages An award of damages is the usual remedy for a breach of contract. It is an award of money that aims to compensate the innocent party for the financial losses they have suffered as a result of the breach. The general rule is that innocent parties are entitled to such damages as will put them in the position they would have been in if the contract had been performed. Loss may be either pecuniary (financial) or non pecuniary loss

3. Equitable remedies Where damages may not be suitable to remedy the breach of contract, the court may order an equitable remedy in the form of : 1.Specific performance 2.Injunctions 3.rescission 4.rectification of a document

4. Pecuniary damages Pecuniary losses or financial losses are calculated and awarded to innocent parties of a breach of contract, for the financial losses that result from not receiving the performance bargained for. Such losses could also include physical harm and injury to their economic position.

5. Non pecuniary losses General rule is that, Non pecuniary losses such as mental distress, disappointment, humiliation etc will not be awarded, as a result of breach of normal business contracts. Addis v Gramophone Co Ltd (1909) Facts : The P had been employed as a manager in a company in India. He was wrongfully sacked for alleged dishonesty. He brought a claim in contract, that the manner of dismissal was harsh and humiliating. He was ostracized by the British community in India and thus suffered mental pain and anguish. Held : The house of lords held that he could recover the usual damages for loss of salary and commission but not for the injury to his feelings.

6. Non pecuniary losses But where the”whole purpose” of the contract is for the provision of pleasure, relaxation and peace of mind, courts are inclined to allow damages for non-pecuniary losses. Jarvis v Swans Tours Ltd (1973) Facts : The plaintiff was a solicitor who had booked a two-week winter sports holiday that was described in the brochure as a 'house party',..with welcoming party, afternoon tea..etc The tour fell far short of what was promised in the brochure. The holiday cost him 63 pounds. Held : The CA with Lord Denning, held that he was entitled to 125 pounds, adding that the damages should include and take account of his disappointment and distress, and not just the cost of the holiday.

7. Non pecuniary losses Even where the”major object” of the contract is for the provision of pleasure, relaxation and peace of mind, courts have allowed damages for non-pecuniary losses. Farley v Skinner (2001) Facts : Mr Farley bought a house in the country side near an airfield. He had asked his surveyors to value the house on the basis of the airfield and noice having an impact on the property. The surveyors did not report properly and said there would be no effect. The house was in fact badly affected by the aircraft noice. Held : The house of lords allowed, Mr Farley damages for distres and inconvenience as they found that a “major object” of the contract was to give pleasure and relaxation to the plaintiff.

8. Limitations on the award of damages The general rule is that innocent parties are entitled to such damages as will put them in the position they would have been in if the contract had been performed. But there are three limitations, which would limit the damages that may be awarded. 1.causation 2.remoteness 3. Mitigation

9. Causation A person will only be liable for losses caused by their breach of contract. The defendant's breach need not be the sole cause of the claimant's losses but it must be an effective cause of the loss. Intervening acts between the breach of contract and loss suffered may break the chain of causation. Quinn v Burch Bros (Builders) Ltd (1966) Facts : The P was an independent sub-contractor carrying out such work as plastering on a building project. In breach of their contractual undertaking the defendants failed to provide equipment 'reasonably necessary' to carry out work safely (a step ladder). The P stood on a folded trestle and slipped and broke his hand. Held : The CA held that the cause of the injury was his own choice to use unsuitable equipment and not the defendant's breach.

10. Remoteness There are some losses that clearly result from the defendant's breach but may be considered too remote from the breach for it to be fair to expect the defendant to compensate. Hadley v Baxendale (1854) Facts : The case concerned a contract for delivery of an important piece of mill equipment, which had been sent away for repair. The equipment an iron shaft, was not delivered until some days after the agreed date. This meant that the mill stood idle without working. The mill owners attempted to claim for loss of profits they would have made in the time between the agreed delivery date and the actual delivery date.

11. Remoteness The court laid down two situations where the defendant should be liable for losses. Hadley v Baxendale (1854) 1.Loss which would arise naturally ' according to the usual course of things ' from the breach 2.Loss 'as may reasonably be supposed to have been in the contemplation of the parties at the time when they made the contract, as the probable result of the breach of it.” Held : The court found that the damage was not one that fit in either one of the two situations, and thus was too remote. See also : Victoria Laundry v Newman (1949) The Heron II (1969)

12. Mitigate losses The claimant cannot simply sit back and allow losses to pile up and expect the defendant to pay compensation for the whole amount. Claimants are under a duty to mitigate their losses by taking reasonable steps. Brace v Calder (1895) Facts : The defendant's, a partnership consisting of four members, had agreed to employ the claimant for two years as a manager of a branch. Two months later the partnership was dissolved, and his job and contract with the oringinal partnership was breached. The remaining partners, offered to re-employ him on original terms, but the claimant refused, and sued for breach of contract instead. Held : The court awarded only nominal damages and said he could have mitigated the loss.

13. Equitable remedies  Equitable remedies are at the discretion of the court.  They are not awarded automatically on proof of damages  They are granted subject to general maxims of equity and individual requirements  They relate to the individual problems suffered by the injured party.