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… • • • • 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… • • • • 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.