THE HASTIE STABLE
DAMAGES for
BREACH OF CONTRACT:
Michael Upton, Advocate
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THE HASTIE STABLE
Implement
Implement and Damages
Implement or Damages
A digression: Black Holes
and why they weren’t sorted out by c.1200
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THE HASTIE STABLE
H engages C the family home
Title is in the name of W
C performs contract defectively
H requires to pay for remedial work
C’s defence to action for damages:H has a contract but no loss; W has a loss but no contract
Alfred McAlpine v. Panatown: H can sue on W’s behalf
Abercromby Motors: H has suffered loss if he’d title when
the work was done
Scottish Enterprise v. Archibald Russel: Ditto if he’s
already paid for repairs
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THE HASTIE STABLE
Abercromby Motors:“if a breach of contract occurs, causing loss that can be
measured in financial terms, [B] may recover substantial
damages even if that loss has been sustained by [C]; if a loss
has been sustained by [C], however, [B] must sue on behalf
of that other, and must accordingly account to [C] for the
damages recovered. The right to raise an action in this way is
deemed by law to exist in any case where the loss resulting
from the breach of contract occurs to a person other than the
contracting party.”
- Lord Drummond Young
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THE HASTIE STABLE
Law Reform (M.P.)(S.) Act 1940, section 1 (abridged):
“(1)(i) the court may, if it is satisfied that the person against whom such
decree was granted is wilfully refusing to comply with the decree,
grant warrant for his imprisonment for any period not exceeding six
months;
(ii) Where the court is satisfied that [he] is no longer wilfully refusing to
comply, with the decree, the court shall order immediate liberation
(2) the court may, in lieu of granting warrant for imprisonment, recall the
decree and make an order for the payment by the respondent to the
applicant of a specified sum or make such other order as appears to
the court to be just and equitable in the circumstances”
THE HASTIE STABLE
“The contract and the breach of it are established.
That leads of necessity to an award of damages. It
is impossible to say that a contract can be broken
even in respect of time without the party being
entitled to claim damages - at the lowest, nominal
damages.”
- Lord President Glencorse,
Webster & Co. v. Cramond Iron Co., 2 R. 753
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THE HASTIE STABLE
‘Solatium’ - Damages for non-patrimonial loss
Contracts concerning personal, family or social interests
- affront, annoyance, anxiety, depression, “a general sense
of depression”, disappointment, disruption, disturbance,
distress, mental distress, substantial distress, frustration, hurt
feelings, injured feelings, inconvenience, irritation, loss of
amenity, loss of peace of mind, loss of reputation, mental
suffering, nervousness, stress, trouble, upset, vexation and
worry.
- “The true distinction seems to be between those cases where
the likelihood of distress or injured feelings is … reasonably
foreseeable at the time of the contract and cases where it is
not.” - Scottish Law Commission, Report No. 174, Remedies
for Breach of Contract (1999), para.3.3.
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THE HASTIE STABLE
Miller Fabrications v. J.&D. Pierce (Contracts):Ps were to supply steelwork for a building on a given
day, shortly before which they said that they wouldn’t
unless the Ds provided a banker’s reference, for which
the contract didn’t provide. Ds sacked Ps; the Sheriff
held that was wrongful repudiation. The Inner House
held instead that refusal to perform except on a
condition that hadn’t been agreed was anticipatory
breach, entitling Ds to rescind; this is so “when a party to
a contract unequivocally indicates … [his] intention not to
perform the contract” (McBryde, para.20-23); “conduct
demonstrative of an intention not to perform fundamental
contractual obligations as and when they fell due” is
repudiation: Edinburgh Grain v. Marshall Food Group.
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THE HASTIE STABLE
Rescission:Lloyds Bank p.l.c. v. Bamberger
(1) Both are absolved from future performance of primary
obligations
(2) Contract isn’t at an end; innocent party can sue for
damages
(3) And both can enforce what’s plainly intended to survive:
arbitration, jurisdiction, choice-of-law clauses
(4) And exclusion & limitation clauses
(5) And accrued, unconditional pre-rescission rights; e.g., rent
arrears
(6) But advances of the price in a sale (other than deposits)
must be returned
(7) Whether a clause survives rescission is a matter of parties’
intentions
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THE HASTIE STABLE
Causation of loss
What is the test?
“the person in search of useful dicta in [the] cases
will, by and large, be disappointed.”
Would the pursuer have done other than
he did?
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THE HASTIE STABLE
Remoteness & Foreseeability
Broken crank-shafts
Soya beans & dyers’ boilers
Canals, by-passes & aqueducts
What did the defender know of the
pursuer’s business?
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THE HASTIE STABLE
Was it a “serious possibility” that in drilling an oil well
the geological pressures would be miscalculated - wellhead cementing would be defective - there’d be a leak
in the hydraulics powering the blow-out preventer’s
shear rams - the underwater control panel would be
disconnected from the BOP bore ram - the BOP
would be disconform to drawings so that the rams
couldn’t operate on drill-pipe joints nor when there
were construction tools down the pipe - and an
explosion would severe communications with the BOP
control unit - and also sever the hydraulics of the
back-up dead man’s switch - and the deadman
switch’s control pod would have a dead battery - oh,
and by the way, the gas-escape alarm would be
switched off so the crew could get some sleep - ?
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THE HASTIE STABLE
The loss must have been reasonably foreseeable as a
serious possibility - not merely reasonably foreseeable
as a theoretical risk:“Lord Reid adopted the words ‘not unlikely’ as the test of
likelihood … [in] the context of a well-shuffled pack of
playing cards [he] described it as ‘not unlikely’ that the top
card should prove to be a diamond (the odds being only 3–
1 against); but he considered that most people would not
say that it was quite likely to be the nine of diamonds (51-1
against). He accordingly appears to have contemplated a
prospect of 3-1 against as within the range of ‘not
unlikely’; greater odds (though less than 51-1) might also
have been regarded by him as giving rise to a prospect
which was ‘not unlikely’.”
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Remoteness in contract
v.
Remoteness in delict
Concurrent liability
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Date of Assessment of Damages
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THE HASTIE STABLE
Prescription
A.M.N. Group Ltd. v.
Gilcomston North Ltd.
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THE HASTIE STABLE
Thank you for your attention
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