Basis For Awarding Contract Damages

Q1. The value of the interest the plaintiff has in a contract forms the standard basis for the award of damages in contract law. For instance, courts will award costs proportionate to the matters in issue and disregard unreasonable cost. Any award of damages other than the loss-based, standard basis is not justifiable as the breach was deliberate and it will not deprive the defendant of the gain he made by the breach of contract. This is supported by the case of Morris-Garner & Anor v One Step (Support) Ltd (2018). This court dealt with the question of Wrotham Park damages, also called “hypothetical bargain” damages, under Wrotham Park Estate Ltd v Parkside Homes Ltd (1974). Under this principle, a claimant may recover a sum that the defendant would have paid it had he before breaching the contract, negotiated a release of its obligations by the claimant.

Q2. Cundy v Lindsay (1878) concerns the issue of unilateral mistake. The issue of unilateral mistake may occupy such a primary position that it would render a contract void. In case of unilateral mistake for mistaken identity, a contract can accordingly be rendered void. This was held in the case of Lewis v Averay (1972). If a party is mistaken as to a term of the contract and he would not have entered the contract but for this mistake, the court can render this contract void. It will be void in case the other party or the defendant knew or should have reasonably known of the mistake. Courts in the case of Lewis v Averay accordingly held that the seller plaintiff can nullify the contract void and can retain title of goods sold.

Q3. In the case of Victoria Laundry (Windsor) v Newman Industries (1949), the plaintiff can recover all loss of profit that would follow in the ordinary course of business. As held in the case of Hotel Services Ltd v Hilton International Hotels (UK) Ltd (1997), the loss of profit that could have been earned if the contract itself was performed is likely to be direct loss. In such case, the loss of profit would be treated as being foreseeable and thus, it is recoverable by the plaintiff. The plaintiff can recover loss for the lucrative dying contracts in special circumstance, if losses were foreseeable and were not 'too remote' subject to the condition that concerned special circumstances giving rise to the losses were notified to, apparent and were brought within the contemplation of the parties in the contract.

Q4. In the current case, the principles around reasonable restraint clause in a contract are applicable. A reasonable restraint clause must be firstly reasonable, secondly of reasonable duration, and thirdly is required to protect business interests of the company. Duration of the clauses will be considered reasonable it they are within 12 months. If otherwise, there is more possibility of being unenforceable. Further, any prohibition of an employee from working for his employing company’s direct rivals must be within the parameters of 10 miles for 6 months. Applying these principles, the concerned clause in the employment contract will be considered reasonable. In the case Rachel breaches this restraint clause, Easyhomes can seek an injunction against Rachel.

Q5. In the current case, the contract is frustrated when the village hall where the contract was meant to perform was burnt down. Frustration of contract allows the parties to be relieved of their contractual obligations. A contract becomes impossible to perform. In the case of Maritime National Fish Ltd. v. Ocean Trawlers Ltd (1935), it was held that frustration ends the contract immediately and automatically. It becomes a method of termination. Thus, in this case where the village hall is not in existence anymore, the parties are relieved of their respective duties and the contract cannot be performed at all.

Q6. The current case is a misrepresentation by Rex of an untrue statement of fact regarding the car, upon which Brian relied in being induced to enter into the contract, and it thereby caused Brian to suffer loss. The current case concerns negligent misrepresentation. Campervan would not have entered the contract had Rex not carelessly made the misrepresentation about the car. He did not have any reasonable grounds for believing its truth as he did not even check the full records of car’s previous history. Campervan can claim for negligent misrepresentation under section 2 (1) of the Misrepresentation Act 1967. Campervan Escapes Ltd may also seek rescission and/or damages as well as a possible breach of contract damages. According to the principle laid out in the case of Salt v Stratstone (2015), Campervan can also seek damages in lieu of rescission