Damages are the most common remedy. They aim to compensate, not punish.

Purpose:

To put the innocent party in the position they would have been in if the contract had been performed (Robinson v Harman [1848]).

(a) Expectation and Reliance Damages

• Expectation loss: based on the value of the promised performance (Chaplin v Hicks [1911] – loss of chance damages).

• Reliance loss: compensates wasted expenditure (Anglia Television v Reed [1972]).

A claimant cannot recover both if it would lead to double recovery.

(b) Causation and Remoteness

Damages are recoverable only for losses caused by the breach and not too remote.

• Hadley v Baxendale [1854] – loss recoverable if it:

  • Arises naturally from the breach, or

  • Was within the reasonable contemplation of both parties when the contract was made.

• Victoria Laundry v Newman Industries [1949] – foreseeable loss recoverable; extraordinary loss not.

• The Heron II [1969] – stricter test for remoteness in contract than in tort.

(c) Mitigation

The claimant must take reasonable steps to reduce their loss (British Westinghouse v Underground Electric [1912]). They cannot recover for avoidable losses.

(d) Liquidated Damages and Penalties

Parties may agree a fixed sum payable on breach.

• Valid liquidated damages are enforceable if they represent a genuine pre-estimate of loss.

• Penalty clauses (intended to punish) are unenforceable.

  • Dunlop Pneumatic Tyre Co v New Garage [1915] – established test.

  • Cavendish Square Holding v Talal El Makdessi [2015] – clause valid if it protects a legitimate business interest and is not extravagant or unconscionable.

Definition:

A court order requiring the breaching party to perform their contractual obligations.

Nature:

An equitable remedy, granted only when damages are inadequate.

When granted:

• Sale of unique goods (e.g. land or art) (Falcke v Gray [1859]).

• Long-term contracts may be enforced if continuous supervision is not required.

When refused:

• Contracts for personal services (De Francesco v Barnum [1890]).

• Where performance requires constant supervision or mutual trust.

• Where the claimant acted inequitably (Coatsworth v Johnson [1886]).

An injunction orders a party to do or refrain from doing something.

Types:

• Prohibitory injunction – prevents a party from breaching (e.g. revealing confidential information).

• Mandatory injunction – compels a positive act.

Key case:

• Warner Bros v Nelson [1937] – actress restrained from working for rival studio (prohibitory injunction upheld).

Granted at the court’s discretion, usually when damages are inadequate and equity demands intervention.

Restitution aims to prevent unjust enrichment, restoring benefits wrongly retained. It is available when a contract is void, voidable, or discharged for frustration or breach.

Examples:

• Recovery of money paid where no consideration received (Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943]).

• Quantum meruit claims – payment for work done when contract ends prematurely (Planche v Colburn [1831]).