Chapter 7 Key debates

Remedies for breach of contract

There are numerous possible essay-style questions on damages for breach and you should be led by the emphasis in the syllabus of your module. The ‘limitations on compensation’ question allows the examiner to test the full range of principles for determining compensation but it is equally difficult for a student to produce an exceptional or unusual answer in the absence of specific readings and analysis. You should therefore ensure that you (i) understand the terminology so that you answer the question set, (ii) cover the relevant ground, and (iii) have read a range of articles and readings. It is vitally important to have the readings to ensure depth to your analysis where the essay focuses on a more specific element of damages, e.g. remoteness, or recovery of non-pecuniary loss or cost of repair damages (Ruxley).

1.    Remoteness has proved popular in recent years as a result of the controversies surrounding the decision in The Achilleas (and the assumption of responsibility test) when compared to the principles in Hadley v Baxendale.

Lord Hoffmann, ‘The Achilleas: Custom and Practice or Foreseeability?’ [2010] Edin LR 47.

Kramer, ‘The New Test of Remoteness in Contract’ (2009) 125 LQR 408.

2.    Cost of repair damages: Ruxley and consideration of the approach taken by Lord Scott in Farley v Skinner (No. 2).

3.    Debate about the differing approaches to agreed damages clause in commercial and consumer contracts or a more general critique of the penalty rule.

Morgan, Great Debates: Contract Law, 2nd edn (Palgrave Macmillan, 2015), 234–42.

Morgan, ‘The Penalty Clause Doctrine: Unlovable but Untouchable’ (2016) 75 LQR 11.

R Halson, Liquidated Damages and Penalty Clauses (Oxford University Press, 2018).

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