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Law For Recover Damages
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Law For Recover Damages
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Question:
Discuss about the Report of Law for Recover Damages.
Answer:
Issue:
After going through the facts that have been given for this assignment, certain issues emerge. The first issue is related with remoteness of damages. Steve can be held liable for the loss suffered by Tom? The second issue is related with the enforceability of the gratuitous promise. In this case, Pamela had not provided any fresh consideration in return of the promise made by Steve gave her a car for the weekend. The third issue that has to be decided in this case is related with the effect of mistake on a contract. In this case, the car was already destroyed regarding which Danny and Steve had made a contract. The last issue in this case is related with promissory estoppel. Trisha had spent several thousand dollars for making customized components while Steve claims that he had signed the contract by mistake.
Law:
The test that can be used for deciding the remoteness of contractual damages was provided by the court in Hadley v Baxendale (1854). Recently, this is each commercial law was again decided by the court in The Achilleas (2008). In this way, during the recent years, the test provided in Hadley v Baxendale as defined by the courts. This is a leading case of English contract law. This case provides the basic rule that can be used for deciding consequential damages arising out of a breach of contract. According to this rule, a breaching party will be held liable regarding all the losses that have been suffered by the other party and should have been foreseen by the contracting parties. Therefore, such a party will not be held liable for the losses suffered by the other party which could not be seen by the breaching party on the basis of the information provided to such a party. For example in this case, Hedley had sued Baxendale for the profits that he had lost as a result of the late delivery. The court declined to allow the recovery of lost profit and stated that the other party can only be held liable for the losses that were generally foreseeable by such a party or if the special circumstances should have been mentioned to the party in advance.
Regarding the second issue, the law of contract provides that a past consideration is not changed by the law as a valid consideration. In Re McArdle (1951), Majorie McArdle had performed some improvements and repairs on a bungalow. The bungalow was a part of the estate of her husband’s father who had left the property to her husband and four of his siblings. After the work was done, the brothers and sisters had signed the document according to which, in consideration of these repairs, the executors promised to pay £480 but the payment was not made. In this case, the court stated that the promised to pay £480 was made after the consideration has already been performed. As a result, the promise regarding the payment was not binding as past consideration is not valid.
Regarding the third issue, the validity of the agreement between the parties can be affected if one or both of the parties are under a mistake. A unilateral mistake is a mistake on the part of one party to the contract. The mistake that is unknown to the other party generally does not impact the enforceability of the contract. Similarly, a unilateral mistake concerning a fact does not effect a validity of the contract. But in case both the parties to the contract under the same mistake regarding a defect, the agreement is considered to be void. Therefore, an example will be considered as void if both the parties to the contract RN mistake that the contract can be performed while in reality, it is not possible to perform the contract. In such a case, the agreement is void (Bell v Lever Brothers Ltd., 1931).
According to the doctrine of promissory estoppel, damages can be recovered by a party if these damages have been caused as a result of the promise made by the promisor and such promise was difficult enough so that the promisee may act on it. The elements that should be present in this regard are that the promisor should have made a promise significant enough due to which the promisee had acted on it. The promisee had relied on such a promise and a significant detriment has been suffered by the promisee. Relief can be provided if the promisor fulfilled the promise. In such a case, the presence of a valid contract is not necessary. The court will see if there was detrimental reliance on changing position on part of the promisee.
Application:
Therefore an injured party is allowed by the law to recover damages that can be reasonably considered as being naturally arising as a result of a breach of contract or the damages that were within the reasonable contemplation of the parties when they entered into the contract. In the present case, Tom cannot be allowed to recover the damages of $5000 per day as his loss in profits because this loss cannot be reasonably contemplated by Steve that no information was given by Tom regarding this loss.
Similarly in the second case, the consideration provided Pamela can be described as past consideration. In the eyes of law, a past consideration is not valid. Therefore an enforceable contract has not been created between Pamela and Steve.
Regarding the issue between Danny and Steve, it can be said that both the party is rendered a mistake as the subject matter of the contract and already destroyed before the parties have entered into the contract. As a result in this case, the contract between Danny and Steve is void.
Concerning the issue between Steve and Trisha, although Steve had signed the contract by mistake but Trisha had already acted on the promise made by Steve. She had spent several thousand dollars for making the customized components. As a result, in this case, Trisha can enforce the agreement against Steve.
Conclusion:
Tom cannot recover the damages of $5000 per day as his loss in profits because this loss cannot be reasonably contemplated by Steve that no information was given by Tom regarding this loss. Similarly, Pamela had not provided any consideration in return of the promise. The contract between Danny and Steve is void. Trisha can enforce the agreement against Steve.
References
Bell v Lever Brothers Ltd [1931] UKHL 2
Hadley v Baxendale [1854] EWHC J70
Re McArdle (1951) Ch 669
The Achilleas [2008] UKHL 48
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