Expectation Interest - Coursework Example

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Expectation Interest

Usually, the defendant would be awarded damages that equal to the cost of cure. For most defective goods, that equals to the diminution in their value. But for some defective goods, the diminution in value is not equal to the cost of cure (Ruxley Electronics v Forsyth (1996)). In those instances, the courts would ascertain damages that are just and fair pertaining to the merits of the case. These are called ‘loss of amenity’ damages (see Ruxley).  Where the breach is caused by non-delivery, the buyer may also sue for damages which would be calculated by the difference between the market value and the contracted value of the good (s. 51 SGA 1979). If, on the contrary, the buyer refuses to pay, the seller can claim for the loss of profits on the good (Charter v Sullivan [1957]).Reliance loss This seeks to put the claimant into the position as if he never entered into contract (McRae v Commonwealth Disposals [1950]). Often, the reliance interest is already covered by the expectation interest.Restitution Interest  In this claim, the contract is set aside and the claimant seeks to obtain the price paid for goods that were not delivered (Whincup v Hughes [1871]). This claim may also be used to recover profits that the defendant made as a result of the breach (Attorney-General), though it is only allowed when other forms of remedies are exhausted and even then, the courts may order the defendant to award the claimant a share of the profit instead of the entire sum. The claimant is also under a duty to mitigate losses. ...
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Summary

In the paper “Expectation Interest” the author analyzes damages recoverable from a breach of contract by the non-breaching party. An award of expectation damages protects the injured party's interest in realizing the value of the expectancy that was created by the promise of the other party.

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