Topic 6 Remedies for Breach of Contract

Topic 6 Remedies for Breach of Contract - TOPIC 6 -...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
TOPIC 6 - REMEDIES FOR BREACH OF CONTRACT Readings: Arjunan & Majid, Business Law in Hong Kong , chap. 19. Where a breach of contract occurs, a “problem” arises and the innocent party is entitled to a “remedy” or to “relief”. A remedy or relief is the solution to the problem. Possible remedies include: (1) Damages (2) Quantum Meruit (3) Specific Performance (4) An Injunction (1) Damages (A) Nature of damages - notion of compensation The term “damages” refers to a sum of money that the court orders the defendant to pay the plaintiff who has proved his case. It is the common law remedy for breach of contract. In contract, damages are calculated by looking at what the position would have been after proper performance of the contract. Thus the purpose of contractual damages is to put the party whose rights have been violated in the same position, so far as money can do so, as if his rights had not been violated i.e. as if the contract had been properly performed. (B) Types of damages (i) Nominal Damages - very small amount awarded - plaintiff does not suffer any loss but his legal right infringed - Surrey County Council v Bredero Homes [1993] 3 All ER 705 Facts: The plaintiff Council awarded a contract to a developer to erect a given number of houses on a particular site. In breach of the contract, the developer deliberately built more than the permitted number of houses to increase its profits. Held: The plaintiff having suffered no loss was awarded nominal damages. Wan-chiu v Magnificent Industrial Ltd [1974] HKLR 183 Facts: The plaintiff employee was dismissed without having received from her employer either notice or payment in lieu of notice. However, she did not seek employment for two months after her dismissal. At trial she admitted that she could have found employment in an equivalent occupation immediately after having been dismissed but did not because she was not interested in getting a job at the time. After two months she found another position where she was paid the same wages. She sued her employer claiming $600 as one month's wages in lieu of notice. Held: Judgment was entered for the plaintiff . As the employee had not mitigated the 95
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
damage caused by the wrongful dismissal, only nominal damages in the sum of $40 would be awarded (The foregoing is extracted from the judgment of Yuen JA in Kao, Lee & Yip (A [2007] 4 HKC 86). (ii) General or Ordinary or Compensatory Damages - damages awarded according to loss suffered by the plaintiff which he must prove (iii) Liquidated damages Normally, damages are unliquidated i.e. not quantified in monetary terms. But parties are free to insert into their contract a clause specifying the sum to be paid in case of breach – that sum is termed “liquidated damages” As the damages payable are pre-specified, it follows that the dispute will be whether there has been a breach, not the quantum of damages. This, of course, pre-supposes that the sum specified is a genuine pre-estimate of the loss. If the sum specified as “liquidated damages” is excessive, the court may hold that it
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/20/2010 for the course AFS abs002 taught by Professor Cat during the Summer '09 term at American Indian College.

Page1 / 10

Topic 6 Remedies for Breach of Contract - TOPIC 6 -...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online