(a) Advise Deborah on any claims that she may have against ODP in Breach of contract,and
(b) Advise Deborah on the damages she may recover if she is successful; include in your advice the principles the court will use when deciding whether to award substantial damages in respect of breach of contract.
A.The formation of a contract is something which has been discussed in details under the given law and the section. Forming of a contract is something which has a number of aspects to itself which when fulfilled form a valid contract. In order to see whether a breach of contract has been committed, one needs to see whether or not there has been a contract, hence when there is a contract then only can a breach of contract take place and thence one can claim the damages from the defendant. In order to form a contract there shall be two parties, or more, in this case there are two parties, Deborah being one and ODP being the other. There are certain valid essentials which need to be fulfilled in order to formulate a valid contract and the valid essentials being, there should be an offer and there should be an acceptance to that offer, and this transaction should take place in exchange for a consideration which is that the offering party might want to receive in exchange of a commodity or a service. This transaction which is being talked about should be in context of a valid and legal dealing and should be something illegal. Moreover the acceptance (AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454) to the offer should be out of free will or consent and should not be a result of coercion or undue influence. Both the parties basic intention should be to create a legal relationship (Administration of PNG v Leahy) between themselves and that each of the contracting parties should have the capacity to form a contract that is they should be of sound mind and that they should not be minors, and that the basis of the contract should be something which should be real and that can be fulfilled and lastly there should be involvement of legal formalities which makes the while affair a legal contract.
Now when the matter is reverted back to the case, it can be noticed that all the essentials of the contract has been fulfilled, as there has been an offer and an acceptance which is legal and the legal formalities, and a legal relation is made (Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309) also have been fulfilled and since Deborah has paid the amount which was required the bills after ODP’s work, the consideration has been considered. Besides there is no force or coercion involved in the agreement of both the parties and that the parties are capable of forming contracts between themselves. Since there is a contract (Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424) one has to see which actions by either of the party can cause a breach in contract and what of the mentioned has been noticed in the given case to proceed with the breach of contract. There are certain clauses which when occurs reaches the point when it can be called a breach of contract where some of them are that the time duration implied in the contract expires, the parties fail to perform their duties within the given period of time, the parties might not have the capacity within themselves to fulfill the obligations which was decided upon when the contract was initiated, the obligations are misunderstood and performed in a way which was not required or they just are not willing to perform the duties which had been decided upon. One of the reason why there can be a breach of contract can also be that there might be a basic clause for the formation of the contract like in this case Deborah was very specific that her house should have a place where she can display her paintings which indeed were very costly and at the same time the room should have the feature to display the paintings. ODP’s senior partner Ahmed assured her that the modern technology has developed glasses which can block the harmful rays of sunlight and hence that would be used for the making of the house and its window settings the paintings would find no harm. And when Deborah got the independent contractors to design her house they strictly followed the specifications and the designs which were provided by ODP, and later it was discovered that no such glass mentioned by ODP was used because it was absent from the specification itself though such glass existed, the specification made by ODP was incorrect due to which Deborah had to incur certain losses which included the charge of getting new windows which could result somewhere around £1,000,000 to £1,500,000 and that the paintings value would be somewhere around £750,000. It can be assumed that upon completion of the house she would have displayed the given paintings and thence discovered that the glass had none of the qualities which Ahmed had mentioned and hence the contract between Deborah and ODP had been breached because one of the most important clause of the contract was that the house to have the respective capacity where she should be able to display her paintings and that for this requirement the installations of certain specific glasses was required which had to have certain properties that included photo or sunlight protective ones. This was something which was not specified and hence the aim of the contract was lost as the specifications mentioned by Deborah and that what was promised by Ahmed was not fulfilled, hence the obligation which had to be fulfilled by ODP was not fulfilled, thus the breach of contract (Foran v Wight [1989] HCA 51; (1989) 168 CLR 385).
Hence now that it has been agreed upon that there exists a breach of contract one has to discuss about the damages (Howe v Teefy (1927) 27 SR (NSW) 301) too which Deborah can claim because she has faced monetary losses and that also because of the non-implementation of the obligation by Ahmed the extra cost that she would have to incur. Either the matter can be legally enforced that is it can be dragged to the court of law or can be solved by methods other than that which can be taken to the court which are also known as ‘alternative dispute resolution’. There are certain kinds of damages which Deborah can claim in this case well and they have been discussed further.
Liquidated damages: they happen to be specific in nature and are very near to the actual damages when one of the parties incur but this is usually something which is mentioned at the beginning of the contract itself which is not seen in this case, and in case there was a clause like that in the contract which is not mentioned in the case study this topic can be something which can be seek help from.
Nominal damages: this can be given in the form of damages which are token like in nature but in the case where such damages are given, no actual money loss is incurred by the other party than the breaching party and hence this is not what Deborah can claim.
Punitive damages: this is a payment which has to be made by the breaching party to the non-breaching party so as to fully compensate for the loss, but this is a way of punishing the wrongs of the breaching party and this is not something which is easily awarded but is seen in rare cases and this might not be something which Deborah can claim.
Compensatory damages: these aim at compensation and Deborah might consider this kind of damage as this puts the non-breaching party in the position where he so he might have been if the breach was not committed.
Apart from the mentioned damages the person can simply ask for monetary compensation for the loss that has been faced by the non-breaching party due to the breach of contract (Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620) by the breaching party, ODP in this case. There are two other methods too which are used when damages are being claimed, namely restitution or cancellation of the contract which is something that Deborah cannot proceed with now and specific performance (Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; 217 CLR 315; 201 ALR 359; 77 ALJR 1853) which also Deborah cannot claim because then the court orders the party to perform or obligate the other party as mentioned in the contract which cannot be done in this case as now the changing of specifications of the glasses which were supposed to be used will not compensate Deborah’s loss in any way.
Hence the above mentioned damages (Shaddock (L) & Associates Pty Ltd v City of Parramatta (1981) 150 CLR 225) are the ones amongst which Deborah can seek help from.
B.Like it has been mentioned above the claims that can be brought up by Deborah would be in the form of damages which she can claim. The claims of Deborah would be basically to compensate for the losses that have been incurred and this like discussed above would be in the form of damages which ODP has to pay or perform. The fact that Deborah would be successful in claiming some damage or the other stands true because it has been proved that that there was a contract between ODP and Deborah and that there has been a breach in contract because of which she has faced the damages which has been mentioned in the case study and also as discussed above. The damages are something when proved have to be decided what and how much. One thing one can be sure of is that Deborah can claim damages from ODP, but the point remains what kind of damages and how much can she claim. This is something which has to be decided by the court of law if the parties are not taking up ‘alternative dispute resolving’ methods, and as far as this case is concerned Deborah would go to a court of law to claim the damages she has faced because of the breach of contract which has taken place in this case. The court of law considers different aspects of the breach of contract and also the remoteness of the breach in order to determine the kind of damages that should be awarded to the aggrieving part. Hence the damages, the kind of damages which can be awarded and the principles which are usually considered when determining the damages which should be awarded has been further discussed in detail in order to determine what kind of damage would Deborah get out of the claims she will make against ODP because of which she has faced losses.
The breach of contract is already something which has been discussed above, that is how the exact measure of the damages of breach would be calculated. Usually there are important ways in which the court decides as to how the breach can be equated with the damages as in how much of damages that has been claimed can and should actually be paid by the breaching party. The principles which are to be considered before awarding the damages are as follows-
Remote nature: the court usually determines the remoteness of the breach which has occurred, that is if the breach if remote enough then only will the court proceed with the awarding of damages and that is how it will decide what kind of damages should be awarded to the non-breaching party. (Hadley v Baxendale)
Causation: it has to be proved by the plaintiff that the breach of contract which has taken place has also resulted in the loss which has been faced by him or her because of the breach which has taken place, even this is a criterion before the court settles the matter about the damages. (As Mason CJ said in EH March v Stramare (E & MH) Pty Ltd)
Mitigation: if it is proved that there is no space for the non-breaching party to minimize, lessen or not increase the loss, that is any of the ways were not present in which the non-breaching party could have avoided or lessened the breach, then the court will proceed with awarding the damages to the party which has incurred the loss and depending upon the remoteness of the loss the damages will be awarded.
the kinds of damages which are awarded by the court also needs to be discussed so that one can spot what damage can Deborah claim and how the court will decide to settle the case by awarding Deborah the required damages.
Remedies for the breach of contract has mentioned various ways in which Deborah can claim the damages and out of the damages which has already been mentioned above, the category of damage that Deborah should claim and can claimare compensatory damages.
The compensatory damages like mentioned above are the damages which would generally restore the good and economic position of the person who has been wronged and this is what Deborah can claim, but this again is divided into several parts and also depends upon the quantum or the measure of damage which has to be determined.
Ex contractu- Breach of contract duty: where the court would award monetary damages so that the loss faced by the plaintiff can be recovered. This is the simplest form of damage which can be claimed in this case as rest of the kinds of damages which are usually claimed in breach of contract do not stand true in this case, including specific performance and cancellation of the contract. Monetary damages or liquidated damages are awarded in this kind of category however the case maybe. Under the compensatory damages, the consequential damages is also a category which has to be studied as this damage might be a direct or an indirect result of the breach of contract as it is in this case where ODP’s specifications of the wrong kind of glasses for the rooms where the paintings were to be displayed made Deborah face a loss where she would have to get new windows placed, but also that the paintings were affected because of being displayed in a room which had glasses which could not protect it from extra sunlight which was exactly what the contract was about which took place between Ahmed and Deborah. These losses faced by Deborah are easy to identify and hence can be recovered in the monetary form where the case can look into the matter and get the monetary loss calculated and award Deborah exactly what she needs to get new windows and also the paintings fixed. This loss would not have occurred if ODP would have paid attention to the requirements of the contract which had already been discussed by Deborah with the senior executive Ahmed, thus the court would reward the required amount of damages.
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