Transcript Document

Overview of Chapter 10
9
Remedies for Breach of
Contract and Statutory
Implied Terms
PART A
Common Law Remedies
1) Discharge for breach/repudiation of contract
• There are two main types of breaches. One type of breach
entitles the innocent party to treat the contract as terminated and
is termed repudiation of the contract. This occurs where the
other party to the contract breaches a condition (essential term).
• If a condition of the contract is breached the innocent party has
an option to either accept the breach and keep the contract alive
(on foot) or treat the contract as discharged. In either case the
innocent party is entitled to sue for damages for the breach.
PART A
Common
Law
Remedies
cont…
2) Remedy of Damages ( Page 150)
• General Rule
The general rule for the award of damages is that they are
compensatory. An award of damages is a sum of money paid
to the innocent party who suffers a breach. Damages are
compensatory in the sense that, as far as money can do it, the
innocent party is to be put back in the same position as he/she
would be in had the breach not occurred: Robinson v Harman
PART A
Common Law Remedies cont…
• Rules Relating to the Award of Damages:
Remoteness of Damages
The rule is often said that damages must not be too remote.
In other words, for damages to be awarded the
consequences or loss resulting from the party’s breach
must have been reasonably foreseeable. If the loss suffered
is not considered to be reasonably foreseeable then it is said
that damages are too remote.
It follows that only losses which are reasonable foreseeable
will be recovered. Losses that are not reasonable foreseeable
are considered to be too remote.
PART A
Common Law Remedies cont…
• Rules Relating to the Award of Damages (cont):
What is a reasonably foreseeable loss?
Losses which arise naturally from the breach and as
well as losses in the reasonable contemplation of the
parties at the time the breach occurred
See : Hadley v Baxendale ( see notes below)
PART A
Common Law Remedies cont…
• Rules Relating to the Award of Damages (cont):
Causation of Damages
Only losses which are caused by the breach are
recoverable. Losses which are not caused by the breach are
not recoverable. The courts use a but for test to determine
causation. In applying the test the courts ask: “but for” test
But for the breach would the loss have occurred?
If the answer is yes then the loss is recoverable as damages.
If the answer is no then the loss is not recoverable.
PART A
Common Law Remedies cont…
• Rules Relating to the Award of Damages (cont):
Duty to Mitigate Loss
The law imposes a duty on the innocent party to take all
reasonable steps to mitigate (lessen) his/her loss. If the
innocent party fails to mitigate his/her loss then the award of
damages will be reduced: Payzu v Saunders
PART A
Common Law Remedies cont…
3) Measure/Types of Damages
• Ordinary, Nominal and Exemplary Damages
Ordinary – Compensatory
Nominal – Awarded but not significant
Explemplary – Defendant is punished
PART A
Common Law Remedies cont…
4) Penalties and Liquidated Damages
• Penalties are not recoverable.
• Liquidated Damages: Damages that are provided
for in the contract.
PART B
Statute Law Remedies: Goods Act and TPA
1) Sale of Goods Act – States & Territories
PART B
Statute Law Remedies: Goods Act and
TPA cont…
2) Trade Practices Act (TPA)
• Remedies for breach of implied terms under Part V of the TPA - TPA ss
75(1) & (3), 75A
Remedies for breach of implied terms under the TPA
S.75A of the TPA provides that where a corporation supplies goods to a
consumer and there has been a breach of the implied terms then the consumer is
entitled to rescind the contract and sue for damages. This can be done by serving
notice to the seller or returning the goods.
• Breaches of implied terms under TPA treated as breach of contract. Plaintiff
entitled to damages and/or rescission
PART B
Statute Law Remedies: Goods Act and
TPA cont…
• These Remedies are available for S.52 and S.51
AA, AB and AC Actions under the TPA:
• S. 80 TPA: FOR INJUNCTIONS
• S.87 FOR OTHER ORDERS
• S.82 TPA: ACTION FOR DAMAGES
Overview Chart
11
E-Commerce &
E-Business
Introduction (page 195)
• Contracts have been increasingly used over the internet for
purchases and sale of goods, services as a license. These
contracts have generally been referred to as “e-commerce”.
• However , strictly speaking not all agreements over the
internet are “e-commerce”. Only transactions which involve
the purchase and sale of goods and services over the internet
are e-commerce.
• License agreements where no money is exchanged are on-line
agreements.
Computer and Internet Access in
Australia
Contracts on the web
• Types of contracts on the web
• TYPE 1 : E-commerce contract between a web-buyer and
web-seller involving the purchase and sale of a good or service
over the internet.
• TYPE 2 : License agreement between the web-hoster and
web-user. No money is exchanged here and no good or
service is purchased.
• TYPE 3: E- Business Agreement Purchase and sale of goods
between two suppliers for the purposes of re-supply. Here
there is no consumer.
Contracts on the web cont…
• Characterising the different types
• E-Commerce Agreements: Contracts are e-commerce ventures
involving consumers and web-sellers of goods and services.
• On-line Licence Agreements:
Contracts are on-line licence
agreements authorising web-users access to the company’s web-site.
Typically there are no sales or purchases and no money is exchanged. The
company is merely using the web-site for advertisements and publicity.
• E-Business Agreements: Contracts are e-business contracts and do
not involve consumers. Typically they involve the purchase & sale for the
purposes of re-supply.
Elements of an E-Commerce & E-Business
Contract
•
•
Web Offer
The offer on the web-site needs to be distinguished from nonoffers such as invitations to treat. To determine whether an
offer has been made use the reasonable person test (objective).
•
Need to distinguish the non-offers:
• Web-advertisements
• Electronic price lists
• Electronic catalogues
Elements of an E-Commerce & E-Business
Contract cont…
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•
•
•
Web Acceptance
The general rule is that acceptance must be communicated to
the offeror. This general rule can be displaced in special
circumstances. See: Acceptance by conduct , mouse click and
email.
Acceptance by conduct
A web-site user can accept by conduct by simply
downloading material (documenting the purchase of
goods/services) of the user’s web-site. Courts apply an
objective test to interpret the actions of the web-site user
Elements of an E-Commerce & E-Business
Contract cont…
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•
•
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Acceptance by mouse-click
A web site user may reach a binding legal agreement by accepting the
web site offer with a mouse-click. For the consumer to be bound the
acceptance must be unequivocal and relate back to the offer. The owner of
the web site must make sure that the web site is able to validate the terms of
the offer from the viewer.
Acceptance by email
This is the most problematic in terms of timing. When does an
acceptance by email take place? At the time of sending the email (postal
acceptance rule) or at the time of receipt (instantaneous method of
acceptance)? No cases have decided the issue. The outcome will depend on
the circumstances of the case.
• Electronic Transactions Legislation
• Electronic Transactions Act 1999 (Cth)
• Based on two principles:
– Functional Equivalence
The law will recognise electronic transactions as
being equal to paper transactions
– Technology Neutrality
The law does not discriminate about different
forms of technology
Domain names
• A domain name is a mnemonic, or plain English,
expression connected to a numeric Internet Protocol
address by the relevant domain name registry
authority.
• There are various levels of domain names used on the
Internet which include:
•
•
•
Top Level Domain (TLD) such as ".com" or ".au“
Second level domain (SLD) such as "colesonline“
Third or Fourth level domain names which are linked
to a specific internet server.
Functions served by domain names
• Domain names essentially serve the function of "location
identifiers". If a company wants to establish a business on
the worldwide web then it needs to register a domain name
with an alphabetical address: www.colesonline.com.au.
• In Australia the main registration body is Melbourne IT (or
INA) which is currently responsible for the registration of
.com.au domain names. For .com, .org, or .net domain names
network solutions is responsible. Each country has a specific
jurisdiction over domain names and this is recognised by the
special suffix put at the end of the domain name: eg: Australia
has .au.