Chapter 18 Remedies for Breach of Contract

Chapter 18 Remedies for Breach of Contract - Chapter 18...

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Chapter 18 Remedies for Breach of Contract 1. Damages Kay Swee Pin v Singapore Island Country Club [2008] “to place the claimant, so far as money is able to do so, in the same position he would have been in had the contract been duly performed … the boject of awarding damages is largely compensatory in nature. “ Hadley v Baxendale [1854] Issue: Remoteness of loss Facts: Claimants owned a mill. A crankshaft, which was essential for the operation of the mill, broke and needed to be replaced using the original as a template. The claimants engaged the defendants, a firm of carriers, to transport the broken part to engineers in Greenwich where a replacement would be made. However, the defendants failed to do so within the timeframe specified, thus delaying the arrival of the new part. This caused the mill to stand inoperative. The claimant sought damages to compensate for the losses sustained whilst the mill was idle. Verdict: Loss was too remote and should not be recoverable. Defendants were unaware that this was the only crankshaft that the claimant possessed. If the claimants had made known to the defendants that the mill would be inoperable without the part, the loss would not be too remote and hence recoverable. Damages for special circumstances are assessed against a party only when they were reasonably within the contemplation of both parties as a probable consequence of a breach. The court held that in this case Baxendale did not know that the mill was shut down and would remain closed until the new shaft arrived . Loss of profits could not fairly or reasonably have been contemplated by both parties in case of a breach of this contract without Hadley having communicated the special circumstances to Baxendale. The court ruled that the jury should not have taken the loss of profits into consideration. Significance: gave rise to distinction between 2 types of damages in which the requirements of remoteness will be satisfied (2 limbs) 1. Naturally arising damages 2. Damages arising from special circumstances Damage is not too remote in contract where it: 1. may fairly and reasonably be considered to arise naturally, in the usual course of things, from the breach itself; OR 2. may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of it In this case, the loss due to the stop in operation of the mill was not reasonably within the contemplation of both parties since most mills should have spare
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crankshafts. The special circumstance that the claimant only had one crankshaft was not known by the defendants nor communicated to them. Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] Issue: Remoteness of loss; 2 nd limb, special circumstance; reasonably foreseeable Facts: Claimants ran a laundry business and purchased a boiler frm the defendants. The boiler sustained some damage and had to be repaired. This delayed the delivery. The claimants had made the defendants aware that they
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