Audio recording 27.1 transcript
Chapter twenty-seven is uncompensatory damages and it is a huge chapter with a lot in it. Which I think reflects the importance of the subject. Remedies, and damages in particular, are what a lots of contractual disputes focus on. So, one of the key questions is, where there is a contract, it has been breached, so what's the consequence of that? And in chapter twenty-seven, twenty-eight and twenty-nine will look at those, we'll, look at that question. As of course did termination in the context of a self-help remedy. But chapter twenty-seven all really hinges upon this quotation from Robinson v Harman, that the rule of the common law is, that where a party sustains loss by reason of a breach of contract, he is, so far as money can do it be placed in the same situation, with respect to damages, as if the contract had been performed. And this is so important that it's not only in the book, but it's on the side and I've read it out. This is a fundamental rule that you really have to know. The court can always order damages for breach of contract, and the point is you can always award money. Money is like a universal common denominator, if you like. And what can you do with money is to try to put the person in the position as if the contract had been performed. And in this chapter though then a number of issues that I looked at, and this is in broad outline of the major sort of themes, if you like. The first is what Lord Reed in Morris-Garner v One Step called conventional damages. Which are typically financial loss, but it is also possible to recover damages for mental distress in some situations as well. And you're trying to put the part into the position it would have been in, had the contract being performed and measured their loss really. So let's say that I entered to contract with you to buy grade A cotton worth a thousand pounds, and you supplied me with grade B cotton worth only nine hundred pounds, then I would get one hundred pounds as the difference in value, sort of measure. Which is a common measure. But sometimes you might get the cost of cure measure. How much do you need in order to remedy the defect yourself? And the very famous case of Ruxley, about a swimming pool which is just a little bit too shallow is the key case to consider, because sometimes the court's going to say it's unreasonable to award cost of cure measure of damages, and you should be limited to the conventional loss measure of damages perhaps. The third box deal with negotiating damages, which has sometimes been called Wrotham Park damages, or hypothetical bargain measure of damages. But the recent decision of the Supreme Court in Morris-Garner v One Step makes it clear that these damages are compensatory in nature, and should be dealt with in the context of Robinson v Harman, is that it's very difficult to work out when negotiating damages will be available. And there's quite detailed critique of most Morris-Garner v One Stepin the chapter. I confess I don't think it's a very good decision from the Supreme Court. And then the last major issue to think about is waste expenditure, or reliance loss that I might pay some money in anticipation of entering into a contract.. Per certainly incur expenditure in preparing for performance, and then if you don't perform, should I be able to cover the reliance loss? And in general, the answer should be yes. Because in general, I've entered into a contract expecting to make more than my expenditure, so it's reasonable for me to claim that. But in some situations where I've made a bad bargain, the court won't allow me to recover my reliance loss, because it's basically not a separate head of loss, but I think part of what's become known as expectation loss. So, all of these areas are explored in much more detail the chapter, but perhaps it's helpful when you start to have an idea about the different things that you'll be looking at as you go through the material.