Chapter 23 Self-test questions

 Damages

. Fuller & Perdue's seminal article 'The Reliance Interest in Contract Damages' changed the way the courts thought about expectation damages and led to a general decline in judges' willingness to protect the performance interest. True or false?

. Two principal methods are used by the courts to fulfil the performance interest. The court may choose to award the claimant 'diminution in value' damages or 'cost of cure' damages. Which of these methods did the House of Lords use in awarding damages to Mr Forsyth in Ruxley Electronics and Construction Ltd v. Forsyth [1996] AC 344?

. In which of the following instances did the judge recognize the fact that parties can and do enter into contracts for reasons other than to make money "where the value of the promise to the promisee exceeds the financial enhancement of his position which full performance will secure" (per Lord Mustill, in Ruxley Electronics and Construction Ltd v. Forsyth [1996] AC 344)? Select all that apply.

. Which of the following aspects of Alfred McAlpine Construction Ltd v. Panatown Ltd [2001] 1 AC 518 made it unnecessary for the judges to express a concluded opinion on the precise scope of Panatown's entitlement to damages in respect of its own loss?

. From the speeches in Ruxley Electronics and Construction Ltd v. Forsyth [1996] AC 344 and in Alfred McAlpine Construction Ltd v. Panatown Ltd [2001] 1 AC 518, we know that a claimant does not have an unfettered right to claim 'cost of cure' damages. Two limits have been explicitly imposed. What are they?

. In principle claimants have the right to choose whether to bring a claim for damages to cover the reliance interest or damages to cover the performance interest. Generally speaking however it will be preferable for them to opt for performance interest damages. Why is this so?

. Prior to Farley v. Skinner [2001] UKHL 49, the leading case on the issue of damages for physical inconvenience or 'mental distress' was Watts v. Morrow [1991] 1 WLR 1421. In the latter case, it was held that damages could be recovered for non-pecuniary loss in two situations. What was the most important change effected by the decision in Farley v. Skinner [2001] UKHL 49 in terms of the cases that would follow?

. Which case poses an obvious difficulty for Lord Scott's division of the case law into two distinct groups in Farley v. Skinner [2001] UKHL 49?

. In terms of the courts' application of Hadley v. Baxendale (1854) 9 Exch 341 to limit the liability of the party in breach, are there strictly two rules or is there only one?

. In Parsons (Livestock) Ltd v. Uttley Ingham & Co Ltd [1978] QB 791, Lord Denning MR suggested that the test of remoteness should not depend on whether the claim was brought in contract or tort, since this essentially involved "swim[ming] in a sea of semantic exercises". Instead he drew a distinction between certain types of losses flowing from breach of contract and proposed that the test of remoteness should differ depending on the type of loss under consideration. Which classes of case did he distinguish? Select all that apply.

. In which of the following types of claim for damages for breach of contract is a contributory negligence defence currently available?

. What is the name given to damages calculated on the basis of a clause of the contract quantifying the amount due on breach?

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