Basic Process for Assessing Damages: 97 Select interest that deserves vindication 97 a. Restitution 97
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- Cockburn v. Trusts Guarantee Co.
- Apeco v. Windmill
- Erie County Natural Gas v. Carroll [HL]
- Jamal v. Moola Dawood Sons Co. [1916, PC (Burma)]
- Campbell Mostyn v. Barnett Trading
MitigationBasics must take reasonable steps to minimize the damages from ∆ breach In sale of goods cases, the mitigation requirement is basically codified: S. 53 – Damages for Nonacceptance (1) If the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against the buyer for damages for nonacceptance. (2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of K. (3) If there is an available market for the goods in question, the measure of damages is to be ascertained (unless there is evidence to the contrary) by the difference between the K price and the market or current price at the time or times when the goods ought to have been accepted, or if no time was set for acceptance, then at the time of refusal to accept. S. 54 – Damages for Nondelivery (1) If the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for nondelivery. (2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract. (3) If there is an available market for the goods in question, the measure of damages is to be ascertained, unless there is evidence to the contrary, by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was set, then at the time of the refusal to deliver. Cockburn v. Trusts Guarantee Co.Facts Company went into liquidation, ∆ wrongfully dismissed & sues for lost wages. Salary at time of dismissal: $5000/year bought a bunch of stuff at the company’s liquidation sale, and sold it for $11k Issue: did mitigate out of any damages? ∆ argued used his time to make profit, which he wouldn’t have been able to do if ≠ dismissed. argued ≠ mitigation because it goes beyond what an employee would be expected to do. He became an entrepreneur/speculator. Didn’t have to do this. Held: mitigated out of damages Although ≠ required to mitigate in that way, the ability to make that money resulted from the breach of K – could not have happened but for the breach. First, he got the inventory because the company went into liquidation. Second, he had the time to buy/sell the inventory because the company dismissed him as a result of the liquidation. Apeco v. WindmillFacts: owns warehouse; ∆ agrees to lease part for 5 years ∆ breaches, finds new tenant. sues ∆ for 5 years of rent, but ∆ says they mitigated by renting to the new tenant. Held: is entitled to the lost rent from ∆ Reasons: Distinguishable from Cockburn: yes, they had found a new tenant, but ¾ of the warehouse was vacant. If ∆ had stayed, the new tenant would have been in addition to ∆ - not instead. So, in this case the second transaction hasn’t mitigated the loss suffered by . Assess by considering causation: did the breach cause or permit the new transaction with subsequent benefit? i.e. is the second transaction dependent on or independent of the breach? Erie County Natural Gas v. Carroll [HL]Facts π manufacturer of quicklime. 8 year lease of gas rights on π property to ∆ gas co, w/ req’mt to supply π with gas. ∆ sold the lease to a third party, who ≠ supply gas. π built their own structure to obtain gas on their remaining portion of the property, at a cost of $60k. At the end of the 8 year period, π sold the gas works for $75k. π claimed the expenditure to get the gas, and also $125k for the cost of their own gas used Held: No award to π. Reasons
π mitigated by selling the structure for $75k. Also, court said it would be unfair to award the additional $125k value of the gas consumed, because then π would profit from ∆’s breach. One Lord called this a “grotesque” result. Comments: However, the question re mitigation is really supposed to be whether the breach caused/permitted the earnings, and in this case it did not. πs were tapping into their own gas, which was always there and which could have been done regardless of ∆ behaviour.
∆ backed out of share sale w/ π K price was $184,000 rupees. As a result of breach, π only got $75,000 rs. π held shares past breach date, then made a series of sales that cumulatively brought in $200,000. (So, higher price than K would have brought in, even) Held: π did not mitigate out of damages, ∆ still obligated to pay. Damages are measured at time of breach. Waiting is at π risk, and if π is found to have mitigated out of damages by waiting and selling at a higher price, then ∆s should also be responsible if π waits and is forced to sell at lower price. π can do whatever he wants after breach, but it’s at his own risk. Conceptually, π could have gone through with first K and then later bought and sold shares again independently shares are fungible. Distinct from Cockburn, in which π could not have done what he did but for the breach. Campbell Mostyn v. Barnett TradingThere may be a class of cases in which it is impossible to resell goods – e.g. because there is no market. Issue: ∆ argued that market price of ham at time of breach was very good – trying to minimize their damages on basis that π could have mitigated out of all damage. But then later, on appeal, ∆ argued that there was no available market at time of breach, and damages should thus be assessed on the price 6 months after the breach. Held: not impossible to resell goods, viable market existed. The two arguments made by ∆ cannot be reconciled, and the Court of Appeal caught this contradiction in finding that there was a viable market.
Directory: outlines outlines -> Chabot College Fall 2010 Course Outline for Computer Application Systems 60 business software applications/general accounting outlines -> Adil Khan Contracts Midterm outline- waldron outlines -> Remedies for breach of promise (1) The Interests Protected outlines -> Chapter Five: Written Documents 1 Unsigned Documents 1 outlines -> Cases and Materials on Contracts outlines -> College of Science and Health outlines -> Evidence outline outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11 outlines -> Course Outline as/huma 2650 0A Download 1.08 Mb. Share with your friends:
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