Remedies & damages

What "Remedies & damages" covers

• Expectation loss protects the claimant's performance interest; reliance loss compensates wasted expenditure where expectation loss is hard to prove.
• Losses must be caused by the breach and not too remote — recoverable if arising naturally or within the parties' reasonable contemplation (Hadley v Baxendale's two limbs).
• The claimant must take reasonable steps to mitigate loss and cannot recover for avoidable loss.
• Damages for defective performance are usually the cost of cure, but may be limited to loss of amenity where cure is wholly disproportionate (Ruxley).
• Damages for distress are generally not recoverable except where a major object of the contract was enjoyment or peace of mind.
• An agreed-damages clause is enforceable unless it is a penalty — the test is whether it imposes a detriment out of proportion to any legitimate interest (Cavendish/ParkingEye).
• Equitable remedies (specific performance, injunction) are discretionary and unavailable where damages are adequate or for personal-service contracts.

Key cases & statutes

The authorities and provisions most likely to matter for this subtopic:

How it's tested in SQE1

SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For remedies & damages, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.

Where candidates lose marks

• Applying the old 'genuine pre-estimate' penalty test instead of the legitimate-interest/proportionality test.
• Confusing the two limbs of remoteness or treating unusual losses as recoverable without notice.
• Forgetting the duty to mitigate and the discretionary nature of specific performance.

FAQ

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