REMEDIES FOR BREACH OF CONTRACT DAMAGES SPECIFIC PERFORMANCE INJUNCTION RECTIFICATION RESTITUTION RESCISSION

1. REMEDIES FOR BREACH OF CONTRACT DAMAGES SPECIFIC PERFORMANCE INJUNCTION RECTIFICATION RESTITUTION RESCISSION QUANTUM MERUIT

2. DAMAGES: Basic common law remedy for breach of contract Money awarded to the claimant as a compensation for the loss suffered as a result of the breach of the contract By awarding damages, the court tries to place the parties in the position that they would have been in had the contract been fully performed The non-breaching party has a duty to mitigate (lessen or reduce) the damages incurred as a result of the breach of contract TYPES OF DAMAGES: Compensatory Consequential Punitive Nominal Liquidated Penalty

3. TYPES OF CLAIMS/INTEREST PROTECTED BY DAMAGES: Interest to be compensated determines the measure of damages payable RELIENCE INTEREST: Compensation is given for expenditures made towards performance of the contract; compensation necessary to put the plaintiff into the position she/he was in before the contract was made EXPECTATION INTEREST: Compensation is given for either lost profit or for the cost of substitute performance; compensation necessary to put the plaintiff into the position he/she would have been in had the contract been performed RESTITUTION: Restoration to the plaintiff of a benefit conferred on the defendant to which the later is not entitled; purpose is not to compensate the plaintiff for a loss but to deprive the defendant of a benefit NOTE: Interests may overlap sometimes (for example, reliance and restitution may overlap, reliance and expectation interests may also overlap) Claims can be combined so long as the victim (non-breaching party) does not get double recovery

4. BASIC PRINCIPLES of DAMAGES: Lord Atkinson in Wertheim v. Chicoutimi Pulp Co. [1911] A.C. 301 (P.C.) on (expectation) damages: [I]t is the general intention of the law that, in giving damages for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been if the contract had been performed. In the case of non-delivery, when the purchaser does not get the goods he purchased, it is assumed that these would be worth to him, if he had them, what they would fetch in the open market and that, if he wanted to get others in their stead, he could obtain them in that market at that price. The purchaser not having got his goods should receive by way of damages enough to buy similar goods in the open market.

5. Sale of Goods Acts Typical Sale of Goods Act clause as enacted in many jurisdictions: “When 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 price or current price of the goods at the time or times when they ought to have been delivered”

6. DAMAGES — LIMITATIONS OF CLAIMS: REMOTENESS Hadley v. Baxendale rules: 1. Damages which may fairly and reasonably be considered as arising naturally from the breach; 2. Damages which may reasonably be supposed to have been in the contemplation of the parties at the time of the contract; (See also Victoria Laundry case) CAUSATION The plaintiff must show that her/his loss was one which resulted from the breach of contract by the defendant. (Direct causal link) MITIGATION It is a duty of every plaintiff to do his best not to increase the amount of damage done CONTRIBUTORY NEGLIGENCE Any negligence by the plaintiff himself, which contributes towards causing the damage, can be taken into consideration in quantifying or assessing his damages

7. TIME FOR ASSESSMENT OF DAMAGES: Time of breach Time of discovery of breach Late performance – the date when performance was actually rendered NOTE: Limitation period set in Statute of Limitations = 6 years from the date the party would have first been entitled to bring action. (Exceptions apply to real estate). In Quebec the limitation period is 5 years in Quebec

8. McRae v. Commonwealth Disposals Commission (1951) 84 C.L.R. 377 Reliance damages are an integral part of expectancy damages (net profit + reliance + other loss - loss avoided) Where the non-breaching party cannot meet the burden of proof with respect to net profit (an amount he can prove would have been made under contract after costs had been recovered), they may only be entitled to reliance damages. Once the plaintiff had proven that there were reliance costs, the burden shifted to the defendant to prove that had the tanker been found the costs would not have been recovered. This is an impossible thing to prove as it is impossible to value a non-existent thing. NOTE: The plaintiff was awarded reliance damages (expenditure £3,000) + restitution (price of a tanker £285).

9. Bowlay Logging Ltd. v. Domtar Ltd. (1982) 135 D.L.R. (3d) 179 To the extent that the breaching party can show that costs would not have been recovered under the contract, the reliance recovery will be reduced by that amount. The law of contract compensates a plaintiff for damages resulting from the defendant’s breach; [but] it does not compensate a plaintiff for damages resulting from his making a bad bargain. Where it can be seen that the plaintiff would have incurred a loss on the contract as a whole, the expenses he has incurred are losses flowing from entering into the contract, not losses flowing from the defendant’s breach. The onus is on defendant to show that if the plaintiff had fully perform the contract its losses would have been very high. NOTE: Non-breaching party was awarded nominal damages of $250.00

10. Sunshine Vacation Villas Ltd. v. Hudson’s Bay (1984) 13 D.L.R. (4th) 93 B.C.C.A. Awards of damages for loss of capital (reliance loss) and loss of profit were alternatives and it was wrong to make an award based on a mixture of the two approaches As the plaintiff had not established that an award for loss of profits would have exceeded the amount of lost capital, the amount of lost capital was the appropriate award.

11. Hunt v. Silk (1804) 5 East 449 The claim for restitution of the money paid in execution of the lease was rejected on the basis of the old and strict rule that if a party has received any part of the benefit that he contracted for then there is no total failure of consideration Treitel: If the benefit received was different in kind from that bargained for, there may be a total failure of consideration QUESTION: Could the tenant get an adequate remedy in damages or does he have to rely on restitution?