Can’t receive damages other than what is listed in contract if the breach is malicious
Issue
Ratio
Notes
P was supposed to have 6 months notice
P was replaced after 1 month
P was rewarded a large amount
In cases of breach of contract there may be circumstances of malice, fraud, defamation, or violence which would justify recovering damages under tort law. Parties will be prevented from bringing these actions under contract law because the defenses available to the defendant in tort law are not available in contract law.
Damages will be limited to what is lost under the contract
Court doesn’t want actions that can be torts being brought in through contracts
D denies P long-term disability benefits to which she is entitled
Mental distress issue
If one is contracting for peace of mind then the mental damages that result from the breach of the contract will fall under prong 2 of Hadley.
The burden is on the plaintiff to prove his/her loss. Court must be satisfied that
An object of the contract was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties
The degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation
SCC Case that affirms that the test in Hadley v Baxendale is the appropriate test for determining damages.
Hadley rule:
An independent cause of action will only need to be proved where damages are of a different sort entirely: where they are beign sought on the basis of aggravating circumstances that extend beyond what the parties excpected when they concluded the contract
20.Punitive Damages
Whiten v Pilot Insurance
When punitive damages are justified because the person is terrible
P has good claim, but is denied and bullied into taking less
D then takes P to court in order to further bully them financially
Sharp business practices
Flowchart for Punitive damages:
Is there horrifying behaviour?
Does this behaviour constitute an “actionable wrong”
This is broader than tort damages (though can include tortious actions), but will likely refer to the breach of a quasi-fiduciary duty particular to the contract (i.e. acting in good faith to pay out valid insurance claims)
“If and only if” the damages awarded as compensation are too insignificant to serve as a punishment, then punitive damages may be awarded
Amount is that which a reasonable jury properly instructive could have concluded that an award in that amount, and no less, was rationally required to punish the defendant’s misconduct
Proportionate to the vulnerability of the plaintiff… should know that contracts involve aggressive self-interested parties
Punitive damages should not be proportionate to plaintiff’s loss because they must be able to “sting” the offending party. A large company will not necessarily be deterred by a proportionate fine
Insurer has a quasi-fiduciary duty ->taking advantage by not paying
21.Mitigation of Loss
Payzu Limited v Saunders
Duty of parties to mitigate economic loss: Can modify w/o consideration to mitigate loss then sue for breach
First look to at the facts to see whether it would be reasonable for the party to accept the offer and enter into business with breaching party again; THEN:
Do an economic analysis:
Accepting the offer does not mean the party loses their ability to sue on the original contract
"[the Plaintiff] can recover no more than he would have suffered if he had acted reasonably, because any further damages do not reasonably follow from the defendant's breach"
Whether someone acted reasonably to mitigate their loss is a question of fact
Reasonable person would have taken offer and then sued for damages
Roth & Co. v Taysen, Townsend & Co.
If one party repudiates and there is an open time frame for the contract the non-breaching party cannot just rely on breaching party to pay for losses
Issue
Ratio
Notes
P contract with D to ship them corn, between July or august.
Party who treats repudiation as a breach is bound to do what is reasonable to prevent he damages from being inflamed or increased
Calculating damages:
If time of performance isn't fixed, then date of breach
If time of performance IS fixed, then date of fulfilment
The determination of whether one is reasonable is the objective standard of the reasonable man, not an individual's personal judgment of what is reasonable
If party repudiates before the day of delivery other party can
