Basic Process for Assessing Damages: 97 Select interest that deserves vindication 97 a. Restitution 97
II. Limiting Factors Intro to Limiting Factors
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- Remoteness
- Parsons (Livestock) Ltd. v. Uttle Ingham [1978, QBCA]
- Kienzle v. Stringer [1981, ONCA]
- Matheson v. Canada [2000, NSCA]
- Summary of Remoteness
II. Limiting FactorsIntro to Limiting Factors:Things in the law of damages that protect ∆s Considerations of courts when determining and limiting damages: Harm what is the loss suffered by ? Justice as proportionality there should be balance b/w wrong and remedy Self-help or individual reliance by s Sometimes s are in best position to mitigate consequences of a civil wrong Efficiency not all wrongs are necessarily things we want to discourage. Courts are cautious in creating incentives/disincentives relating to particular activities/conduct Judicial Administration ease of administrating remedies. It’s impossible to achieve perfection in this, and very expensive. Sometimes courts will adopt seemingly-arbitrary rules to limit damages just because the quest for perfection isn’t worth the effort.
Hadley v. BaxendaleThis case is always the starting point for policy and law on remoteness of damages. Facts: crankshaft sent away to get fixed; delay resulted in loss of profit. Held: court refused to award lost profits. Reasons: Profits will always be lost, but perfect compensation isn’t the only goal. The court set out an approach that has been seen as very restrictive – The Foreseeability Rule: “Now we think the proper rule in such a case as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated.” “But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract. For, had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them.“ It’s a pretty strongly policy based rule: People should be able to operate based on common sense assumptions. If this isn’t the case, it would be really bad for commerce, because everyone would have to spend time worrying about all the possible consequences of any action they take. It makes sense to facilitate risk-planning that’s what contract is all about. We want to encourage parties to privately plan risks. Note: this case was decided before: Limited liability the case was b/w entrepreneurs personally instead of companies Liability insurance there were no insurers for this sort of thing. The words of the case aren’t really as strict as they sound, anymore, in light of these developments.
Lack of ventilation in storage hopper resulted in pigs dying of ecoli when their food went toxic. Issue: is vendor responsible for the pigs’ death? Held: Not too remote. Vendor liable. CA overruled TJ, who found that it was not reasonably foreseeable that mouldy pignuts would cause ecoli in pigs. Reasons: An unfit hopper, the point of which is to store food, could foreseeably cause illness in pigs. Comments: It’s all variable depending on how you ask the question Hadley can be flexible, and courts manipulate it depending on how the question is framed. Apparently, no expert in pig food or pigs would ever think that mouldy pignuts would result in ecoli – it’s extraordinary. But, the less you know about pigs, the easier it is to say that improper food storage could cause illness. So, don’t get bogged down in statistical probabilities or the words it all comes down to what the court thinks is a fair allocation of risk. Firms that design, manufacture, sell and install food storage devices should be responsible for the risk of bad food caused by the device malfunctioning. People who sell products to store food shouldn’t be surprised at being held responsible for food that has been negatively affected by their faulty product. They probably won’t be unfairly surprised at that responsibility, even if a pig expert (i.e. the farmer) would have been completely surprised by what happened. Kienzle v. Stringer [1981, ONCA]Facts Recall: family farm dispute among siblings – son wanted to buy but lawyer made deal with estate instead of with siblings. As a result of the delay in acquiring the farm, missed an opportunity to buy another farm (because the sale was predicated on the sale of the family farm) Issue:
action against lawyer for cost of perfecting title (which he got), but also for: 1. Lost profit of $20k (because he stopped farming for two years) 2. Lost secondary transaction Lost profit on the acquisition of the second farm – increased in value by $44k by trial. claimed $23k, the difference b/w appreciation on the farm lost and appreciation on the farm he had. Held: $10k for one year lost farming profit, nothing on the secondary transaction. Reasons: Although the solicitor’s negligence did cause all the future losses, the court wouldn’t award damages for all of them. Lost farming profit: one year was reasonable amount of time to disentangle himself from the mess. Lost secondary transaction profits: Doesn’t even go to Hadley v. Baxendale, just goes to policy: floodgates concern if lost opportunity costs could be awarded for land sale transactions. At the bottom line, it’s just kind of unfair to make a solicitor responsible for this risk, because a second transaction that a person was going to enter is entirely out of ∆’s control. It would be disproportionate to the amount the solicitor was paid and the risk he agreed to take on to give this risk to him too proportionality. Fee is calibrated to value of property and associated risks, not in wider context. Basically, court says we draw an arbitrary line because we have to know to stop somewhere, and the policy is to stop at the second transaction.
Issue: also sued for loss of subsequent projects – damage to reputation b/c of cancelled bond. Held: no recovery of subsequent losses Reasons Although government did technically cause the loss of subsequent transactions, it’s not fair to hold them responsible for something they couldn’t foresee at time of K. Court doesn’t want to go into statistical probabilities and the likelihood of this happening – just goes with what seems generally fair. It wouldn’t be just to find that ∆ had taken on the risk of subsequent transactions. In contract law, one party doesn’t normally become the insurer of the other party’s financial health.
Policy is to encourage certainty, dispute resolution, and allocation of risk So, consider: Parties’ reasonable expectations in this type of K The usual consequences of breach Evidence (if any) of commercial expectations – how are the risks usually assigned? Did the parties explicitly address the risk?
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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