Damages for the Breach of the Contract - Assignment Example

Law of Contract xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Question 1 Damages for the breach of the contract Rowan (2010) points out that; damages under common law are remedies that an injured party is entitled to due to breach of contract by a party that they entered to a contract with. Damages available for the plaintiff may be exemplary, such that they allow punishment of the defendant and the compensation of the injured party, nominal damages such that they only recognize any infringement of the legal rights of the injured party or ordinary such that the plaintiff will be compensated to cover the actual loss they suffered (Gray 2013). According to Banks (2010), for one to claim damages for a breach of a contract, they must be able to prove that, due to the breach of the contract, they consequently suffered loss. If the injured party had taken, any reasonable step to reduce their loss increases their chances for compensation in their claims. A party to a contract can claim damages in a breach of the contract if they are able to establish that they lost a prospect due to the breach, they wasted their expenses or they suffered any loss in the event of the breach of the contract. Jade enters into a contract with Hari, the terms are that Hari should return the car in good condition and should pay the standard rate for the corvette car. However, Hari runs into a limousine destroying Jades corvette car, this makes her incur cost repairing it as well as losing other twenty-booked appointments. She as well loses the opportunity for having the corvette car advertised in an Australian car magazine, she even incurs some medical expenses due to the stressed suffered from the loss incurred after the breach of the contract by Hari. Jade in attempt to correct the damage, gets into a contract with Rosso, who fails to deliver as per the specifications termed in their contract making Jade suffer more loss since she had to terminate the contract as (Williams 2010) explain. According to Christopoulos & Fan (2009), Jade can claim liquidated damages for the entire specified sum he has lost due the breach of the contract between him and Hari. Jade has lost the standard rate she was going to get from Hari or the other twenty bookings she had received from people who wanted to use her corvette. According to Donohoe & Coggins (2011), Jade is also bona fide of the actual loss suffered due to the various expenses she has had to incur as a result of the breach of the contract with Hari. She has spent $ 100,000 for repairing the damage caused on the corvette car after Hari ran in to a limousine. As per the contract, she was to return the corvette in a perfect condition. Jade also spent $50,000 for counseling and medical checkup after being stressed from the loss she suffered. By having to cancel the bookings, Jade increased her liquidated damages that she claims against Hari since she lost a profit of about $50,000, which she would have earned from the clients if Hari had not damaged the corvette car. McKendrick (2012) supports that, a plaintiff can also claim for being deprived off the chance to generate income, profit or utilize an opportunity due to breach of a contract. Due to the breach of the contract with Hari and with Rosso, Jade foregone the opportunity to earn the benefits she would have earned if there were no breach of the contracts. This makes Jade a bona fide claimant of expectation damages such that the court can enable her receive exactly what she had contracted for. This will make Rosso compensate Jade such that she will enjoy what she expected to enjoy by getting into the contract. Thus, Rosso will also supply Jade with natural pearls as agreed and not the cultured ones as Rosso decided to deliver because as termed in the contract, Rosso was to deliver natural pearls at the agreed price and not cultured pearls. As explained by Chillemi & Mezzetti (2013), Jade had also asked for pink cashmere at the price agreed. This means that, before they entered into the contract, Rosso had estimated the actual cost for making the coats and thus the price agreed upon cannot be changed. Hence, Rosso will not be allowed to deliver the blue, purple and black coats, as she wants, because it will be a breach of the contract. Jade can also claim damages for loss of chance; this is because, from the breach of their contract with Hari, the corvette car had to remain in the repair shop for three months. During this time, she was unable to find another corvette car to outsource and rent to the other twenty clients who had booked the corvette car; she was therefore forced to cancel all the bookings losing the chance to make profit from the clients. Question 2 Jade was entitled to terminate the contract with Rosso. Rosso has breached the contract leaving Jade with no choice but to terminate the contract as (Blackshield & Williams 2010) states. The grounds for Jade’s contract termination are for the actions of Rosso of “supplying and delivering goods that are not in good condition”. The contract stipulates that the purchaser shall have the right to terminate the contract in the event the supplier does not supply and or deliver goods in good condition, (Goodall 2008). The supplier (Rosso) failed to supply goods in good condition in that the goods she delivered to purchaser (Jade) were not as they agreed in the contract and therefore they were not in good condition, (Proctor 2005). In this case as (Bartlett 2000) explain, good condition is taken to mean the specifications of the purchaser. These breach, of supplying goods not in good condition, entitled Jade to terminate the contract as they agreed, (Neal 2002). The grounds for termination of the contract are as follows; Fast, Rosso delivered berets and cashmere coats, which were not as per the specifications of the contract, (Hopkins 2005). For the berets, Rosso delivered eleven of them as per the specifications but one was not in raspberry as specified in the contract. This is breach of contract. Rosso delivers cashmere coats that are not pink as Jade specified. Rosso explains that she can only source cashmere coats that are blue, purple and black by 15th September 2013 of which she delivered. This is breach of contract as (Furmston et al. 2007) explain. Another ground is that Rosso failed to deliver natural pearls and instead delivered cultured pearls. In essence, Jade is entitled to terminate the contract and has enough ground for termination of the contract, (Woods 2002). Willshee v Westcourt Ltd [2009] WASCA 87. Nevertheless, the action of Jade of wearing the red beret at the five-in-dime supplied to her by Rosso, is a sign of approving to the specifications delivered to her by Rosso, (McKendrick 2012). The red beret was not as per the specification in the contract. As such, wearing the red beret is a sign of approving the delivered goods and therefore this is an indication that she approved to the specifications delivered thereby refuting her the right to terminate the contract. Question 3 The advice in question two would not be different if Jade’s contract with Rosso had contained these terms. The time of entering the contract for these two parties was on 15th August 2013. These terms, as outlined, indicate that the contract was subject to Rosso obtaining the approval of the Minister for trade within fourteen days of entering in to the contract. As such, the fourteen days indicated in the contract terms were up to and until 29th August 2013. The terms continue to indicate that Rosso had not yet written to the Minister for trade by 1st October 2013. This indicates that it is Rosso who had the mistake, (Whincup 2006). She did not write to the Minister for trade to obtain an approval within the stipulated period of the contract terms, that is, within fourteen days. As such, Rosso is wholly liable for breach of contract as she failed to carry out her functions and duties as stipulated in the contract terms. In this case, Jade is wholly entitled to terminate the contract with Rosso. McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; [1951] ALR 771; (1951) 25 ALJ 425. Nevertheless, the advice would have changed if Rosso had written to the Minister for trade within the stipulated time of 14 days. If Rosso had obtained approval, which was very likely from the Minister for trade, Jade would have still terminated the contract if Rosso fail to deliver as per the specifications terms of the contract. The Minister for trade would have likely approved the contract as a way of creating opportunities and creating income for the involved parties, (Whincup 2006). As such, Rosso had the whole duty to write to the Minister requesting for approval a duty that she failed to perform and hence Jade had no choice but to terminate the contract with her. Jade is thereby entitled to terminate the contract. If Rosso had obtained approval from the Minister for trade within the terms of the contract and had supplied the items as per the specifications outlined in the contract, Jade would have no basis of terminating the contract. As per the contract terms for obtaining approval from the Minister for trade, Rosso failed to write to the Minister within the time stipulated in the terms (fourteen days). As such, she did not observe all the terms of the contract and therefore Jade was right to terminate the contract, (Williamson 2002). This cannot change from the previous advice because, in both the cases, Rosso had failed to observe all the terms of the contract, (Heffey et al. 2002). The contract, in clause three, states that, in the event the supplier breaches clause five of the contract, the purchaser (Jade), shall have the right to terminate the contract immediately. The clause five states that, “all goods supplied pursuant to this contract shall be delivered in good condition.” Rosso did not supply the goods in good conditions, as they were not supplied at the time specified in the contract, (Owens et al. 2011). The supplier (Rosso) had breached the contract by not writing to the Minister for approval of the contract. By this, Rosso breached the contract and as stated in the contract, Jade had to terminate it with immediate effect, (Richards 2006). References Banks, G, 2010, lost profits for breach of contract: would the court of appeals apply the second circuit's analysis, Alb. Bartlett, R, H, 2000, native title in Australia: Butterworth-Heinemann. Blackshield, A, & Williams, G, 2010, Australian Constitutional Law and Theory: Commentary and Materials, Federation Pr. Chillemi, O, & Mezzetti, C 2013, optimal procurement mechanisms: bidding on price and damages for breach, economic theory. Christopoulos, N, & Fan, J, 2009, Australia-when can rectification costs be recovered as damages for breach of contract-the Australian high court clarifies. Donohoe, S, & Coggins, J, 2011, liquidated damages in construction contracts: Are there a Schism between the Australian and English Courts. 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