Breach, Damages and Equitable Remedies

Introduction and context

Contract law is concerned not only with the formation of enforceable obligations but also with the consequences of non-performance. A breach may cause financial loss, disrupt commercial planning, deprive a party of an expected opportunity, or threaten the continued viability of a business. The law therefore provides a graduated response: the innocent party may affirm the contract, terminate it where the breach is sufficiently serious, claim damages, seek restitution, or request an equitable remedy such as specific performance or an injunction.

This chapter adopts the terminology and leading authorities of the common law of England and Wales. Statutory rules may modify the position in particular sectors. Important examples include the Sale of Goods Act 1979, the Consumer Rights Act 2015, the Unfair Contract Terms Act 1977 and legislation governing construction, employment, insurance and insolvency. A practitioner must therefore identify both the common-law rule and any applicable statute before advising a client.

The central aim of damages is generally compensatory rather than punitive. The usual question is: what financial position would the claimant have occupied if the contract had been properly performed? That question must be controlled by causation, remoteness, mitigation, proof and any valid contractual allocation of risk.

Learning objectives

By the end of this chapter, a student should be able to:

1. Distinguish actual, anticipatory and repudiatory breach.
2. Explain termination, affirmation and election.
3. Calculate expectation, reliance, restitutionary and consequential losses.
4. Apply causation, remoteness and mitigation principles.
5. Distinguish liquidated damages from unenforceable penalties.
6. Assess specific performance, injunctions and restitution.
7. Advise a commercial party on remedies using authority, evidence and risk analysis.

1. Classifying breach

1.1 Actual breach

An actual breach occurs when a contractual obligation is not performed when performance is due, or when performance is defective. It may concern:

• non-performance, such as failure to deliver goods on the agreed date;
• defective performance, such as delivery of goods that fail contractual specifications; or
• late performance, where time is contractually important or the delay constitutes a sufficiently serious breach.

The legal consequences depend on the term breached. A condition is a term whose breach permits termination and damages. A warranty gives rise to damages but not termination. An innominate term is classified by examining the consequences of the breach: termination is available only if the breach deprives the innocent party of substantially the whole benefit of the contract, following Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd.

A contract may also expressly classify terms or state that time is of the essence. Such wording is important but is interpreted in context. A party cannot ordinarily convert a minor breach into a right of termination merely by using emphatic language if the contractual construction does not support that result.

1.2 Anticipatory breach

Anticipatory breach occurs before the time for performance when one party:

• expressly refuses to perform; or
• acts in a manner that makes clear that it will be unable or unwilling to perform a fundamental obligation.

An anticipatory breach may be accepted by the innocent party, which brings the contract to an end and permits an immediate damages claim, or may be rejected by keeping the contract alive. The innocent party must communicate its election clearly. In White & Carter (Councils) Ltd v McGregor, the House of Lords recognised that, in some circumstances, a claimant may continue performance and claim the agreed price rather than accept repudiation. That option is restricted where performance requires cooperation from the other party, where the claimant has no legitimate interest in performing, or where performance would be oppressive or wasteful.

The innocent party should not delay unnecessarily. If it affirms the contract, it may lose the right to terminate in respect of that breach. Affirmation may be express or inferred from conduct, but mere silence is not normally sufficient.

1.3 Repudiatory breach

“Repudiatory breach” describes conduct showing an intention not to be bound by the contract or a breach so serious that it permits termination. Repudiation is not automatically effective as termination. The innocent party must elect either to:

• accept the repudiation, terminate future primary obligations and claim damages; or
• affirm the contract, preserve the contractual relationship and remain bound to perform its own obligations.

Termination does not usually undo accrued rights. Rights to payment that arose before termination, jurisdiction clauses, arbitration clauses, limitations and other provisions intended to survive may remain effective.

Termination is different from rescission. Termination operates prospectively for breach. Rescission, in its technical sense, sets aside a contract for factors such as misrepresentation, although the terminology is sometimes used loosely in commercial practice.

1.4 The effect of termination

Termination releases the parties from future performance, subject to the contract and statute, but does not erase the breach. The innocent party may claim damages measured by the loss caused by the termination. A party considering termination must therefore establish both a qualifying breach and a valid election. Wrongful termination is itself a repudiatory breach and may expose the terminating party to substantial liability.

2. The architecture of a damages claim

A claimant normally proves the following sequence:

1. A valid contract and an enforceable obligation.
2. Breach by the defendant.
3. Factual and legal causation of loss.
4. Loss that is not too remote.
5. Reasonable mitigation.
6. A provable amount, adjusted for benefits, contributory factors, contractual limits and uncertainty.

The claimant bears the burden of proving breach and loss on the balance of probabilities. Where the amount cannot be calculated precisely, the court may make a reasonable assessment, but speculation is not a substitute for evidence.

2.1 Expectation interest

Expectation damages, or loss-of-bargain damages, place the claimant in the financial position it would have occupied had the contract been performed. They are the normal measure for a profitable commercial contract.

A simple model is:

The terms must be measured at a legally appropriate date and adjusted for avoided costs, substitute transactions, contingencies and benefits received. For defective goods, the usual measure may be the reasonable cost of cure or the diminution in value. The court chooses the measure that best reflects the contractual interest and avoids economic waste. In Ruxley Electronics and Construction Ltd v Forsyth, the cost of rebuilding a swimming pool was disproportionate to the benefit, so the court awarded a modest sum for loss of amenity rather than the full rebuilding cost.

2.2 Reliance interest

Reliance damages reimburse expenditure reasonably incurred in reliance on the contract, seeking to restore the claimant to the position it would have occupied had the contract never been made. They may be useful where expected profits are difficult to prove. Examples include preparatory expenditure, mobilisation costs and wasted professional fees.

Reliance recovery is not automatic. The defendant may show that the expenditure would have been incurred anyway or that the contract would have produced a loss. In such a case, awarding reliance expenditure could overcompensate the claimant. The claimant cannot recover both full expectation loss and the same expenditure twice.

2.3 Restitutionary recovery

Restitution responds to unjust enrichment rather than simply compensating loss. It seeks to reverse a benefit obtained by the defendant. If a party pays an advance for goods that are never supplied, recovery of the advance may be restitutionary. The value of a non-money benefit may be assessed by its reasonable value, subject to applicable rules concerning failure of consideration, total failure, impossibility and counter-restitution.

Restitution is distinct from restitutionary damages, a rare remedy in exceptional cases where the defendant's gain is treated as the appropriate measure for breach. Contract law does not generally award the claimant all profits made by the defendant merely because the claimant suffered a breach. Attorney General v Blake illustrates the exceptional nature of an account of profits for breach, particularly where ordinary remedies are inadequate and the defendant's obligation has an unusual public or fiduciary character.

2.4 Consequential and incidental loss

Consequential loss is often used loosely. In legal analysis it may refer to losses flowing from the breach beyond the immediate difference in contractual value, including lost production, lost sales, additional financing costs or reputational effects. Such losses are recoverable only if causation, remoteness and proof requirements are satisfied. Contractual clauses using the expression “consequential loss” must be interpreted carefully; the label does not always have one fixed meaning.

2.5 Non-pecuniary loss

Damages for distress, disappointment or injured feelings are generally unavailable for ordinary commercial contracts. An exception may arise where the object of the contract is pleasure, relaxation or freedom from distress, as recognised in Jarvis v Swan Tours Ltd. A commercial claimant may also recover for injury to reputation in appropriate cases, but proof and remoteness remain essential.

3. Causation, remoteness and proof

3.1 Factual causation

The usual factual test asks whether the loss would have occurred “but for” the breach. If the loss would have occurred regardless, damages for that loss are not caused by the breach. Complex cases may involve concurrent causes, intervening events or several responsible parties. The claimant must identify the counterfactual world of due performance and compare it with the actual world.

3.2 Legal causation and intervening events

Even factually connected losses may not be legally attributable to the defendant. A new intervening act, such as an independent decision by the claimant or a third party, may break the chain of causation. The analysis is practical and sensitive to the contractual allocation of responsibility. Ordinary responses to breach, including reasonable attempts to mitigate, normally do not break the chain.

3.3 Remoteness: the Hadley rule

The classic rule from Hadley v Baxendale has two limbs. Loss is recoverable if it:

1. arises naturally, according to the usual course of things, from the breach; or
2. was within the reasonable contemplation of both parties when the contract was made because special circumstances were communicated.

The modern approach asks what the defendant had a sufficient knowledge of at the time of contracting and whether the type of loss was within the relevant scope of responsibility. In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, ordinary lost profits were recoverable where the defendant knew the machinery was needed for the claimant's business, but unusually lucrative government contracts were too remote because they had not been communicated.

The decision in The Heron II demonstrates that the required likelihood may be more demanding than mere theoretical possibility. For commercial advice, the practical lesson is to disclose unusual vulnerabilities, dependencies and profit opportunities before or when contracting.

3.4 Loss of chance

Where breach destroys a valuable commercial opportunity, the court may assess the value of the lost chance rather than assume the claimant would certainly have succeeded. The claimant must show that the chance had real and substantial value, not merely speculative hope. This method is distinct from a claim for guaranteed profits.

3.5 Evidence and uncertainty

Evidence may include the contract, specifications, market prices, invoices, management accounts, expert valuation, comparable transactions, sales forecasts and mitigation records. A court is more likely to accept a forecast supported by historical performance and independent evidence than an optimistic internal projection prepared after the dispute began.

4. Mitigation and contributory issues

The claimant must take reasonable steps to reduce loss after breach. It need not take extraordinary risks, act for the defendant's benefit, or accept an unreasonable substitute. A failure to mitigate does not usually defeat the claim completely; it reduces recoverable damages by the loss that reasonable action would have avoided.

The mitigation rule is objective but applied in context. The claimant's resources, market conditions, timing and commercial pressures matter. In British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd, benefits obtained through reasonable mitigation were taken into account. A claimant may recover reasonable mitigation expenses even if the attempt ultimately fails.

A claimant is not required to accept a repudiation. If it elects to affirm, the consequences may affect the assessment of loss. It must, however, avoid accumulating avoidable loss after it becomes clear that performance will not occur.

Contributory negligence generally does not reduce damages for a pure breach-of-contract claim, although it may apply where the same facts also constitute a tort and where statute permits. Contractual terms, causation and mitigation often perform the practical work that contributory negligence performs in tort.

5. Worked commercial calculation

Assume Seller agrees to deliver 1,000 units at £50 each. Seller repudiates when the market price is £62 per unit. Buyer reasonably purchases replacement units at £65 per unit, incurs £1,200 in additional transport costs, and saves £800 in costs that would have been incurred under the original transaction. Assume the replacement purchase is timely and equivalent, and no contractual limitation applies.

The basic price difference is:

Adding reasonable additional transport and deducting avoided costs gives:

The assumptions are important. The replacement must be reasonable, the quantities and quality must be comparable, and the claimant must not recover losses unrelated to the breach. If the buyer could have obtained equivalent units for £62 but unreasonably paid £65, the defendant may argue that the excess £3,000 was avoidable.

6. Contractual allocation of damages

6.1 Liquidated damages

A liquidated-damages clause fixes the sum payable upon a specified breach. It promotes certainty and reduces proof costs, especially in construction, supply and technology contracts. The clause is enforceable if it protects a legitimate interest and is not out of all proportion to that interest. The Supreme Court's decision in Cavendish Square Holding BV v Makdessi and ParkingEye Ltd v Beavis rejected an overly mechanical comparison with a pre-estimate of loss.

The analysis asks, in substance:

• What legitimate interest is protected?
• Is the stipulated detriment unconscionable or extravagant compared with that interest?
• Is the clause a primary price or performance mechanism rather than a secondary sanction for breach?

The commercial context, bargaining power, sophistication and drafting all matter. A clause may be enforceable even though the precise loss was difficult to estimate, but it cannot be used merely to punish.

6.2 Penalties

A penalty is a secondary obligation imposing a detriment out of proportion to the innocent party's legitimate interest. Courts look at substance rather than labels. Calling a clause “liquidated damages” does not make it valid, and calling it a “penalty” does not invalidate it. If unenforceable, the innocent party may generally pursue ordinary damages, subject to the contract and proof.

6.3 Exclusion and limitation clauses

A limitation clause may cap liability; an exclusion clause may exclude categories of loss. Construction is governed by the wording, context and statutory controls. Under the Unfair Contract Terms Act 1977, certain exclusions are ineffective or subject to reasonableness requirements, especially in business transactions involving negligence, standard terms or statutory obligations. Consumer contracts are additionally controlled by the Consumer Rights Act 2015.

A carefully drafted clause should identify the risks allocated, define relevant categories, state whether the cap applies in aggregate or per event, address indirect or consequential loss, and preserve liability that cannot lawfully be excluded. A court will not normally allow general language to defeat the contract's central obligation without clear wording.

7. Equitable and restitutionary remedies

Damages are the primary remedy, but common-law damages may be inadequate. Equitable remedies are discretionary and depend on conduct, practical justice and the availability of an effective order.

7.1 Specific performance

Specific performance orders a party to perform its contractual obligation. It is most likely where the subject matter is unique, such as particular land, rare goods, or shares that cannot readily be purchased in the market. It is usually refused where damages are adequate, where the order would require constant supervision, where enforcement would be oppressive, or where the contract involves personal service or a relationship of trust that has broken down.

The claimant must show readiness and willingness to perform its own obligations. Delay, acquiescence, sharp practice or unclean hands may defeat the application. Specific performance is not ordinarily ordered for personal-service contracts because of autonomy and supervision concerns, although a negative injunction may sometimes restrain work for a competitor if it does not effectively compel personal service.

7.2 Injunctions

A prohibitory injunction restrains threatened or continuing conduct, such as disclosure of confidential information or breach of a negative covenant. A mandatory injunction requires an act, such as removal of an obstruction, and is granted cautiously.

For an interim injunction, the court commonly applies the approach associated with American Cyanamid Co v Ethicon Ltd:

1. Is there a serious question to be tried?
2. Would damages be an adequate remedy for the applicant if relief were refused?
3. Would damages be an adequate remedy for the respondent if relief were granted but the applicant ultimately lost?
4. Where does the balance of convenience lie?

The court may require a cross-undertaking in damages, by which the applicant promises to compensate the respondent if the injunction proves unjustified. Urgency, evidence, proportionality and full-and-frank disclosure are critical.

7.3 Restitution and unjust enrichment

Restitution may require repayment of money transferred under a failed basis, reversal of benefits obtained through mistake, or an account for a benefit that equity requires the defendant to surrender. The modern analysis commonly asks whether:

1. the defendant was enriched;
2. the enrichment was at the claimant's expense;
3. the enrichment was unjust; and
4. no defence, such as change of position, defeats or limits recovery.

Restitution may be available after a contract is discharged for total failure of consideration, but partial performance, contractual risk allocation and counter-restitution must be examined. It is not a universal alternative to damages.

7.4 Equitable bars and discretion

Equity may refuse relief where the claimant has acted unconscionably, delayed excessively, misled the defendant, or cannot offer reciprocal performance. The court considers the practical consequences of an order. Equitable relief is therefore less predictable than a debt claim or ordinary damages and should be supported by a clear evidence strategy.

8. Applied case: Northstar Components Ltd

Background

This illustrative case concerns Northstar Components Ltd, a manufacturer that contracted with Meridian Motors plc to supply specialised battery housings. The contract required delivery of 10,000 units by 1 June, included a £40,000-per-week delay clause, capped ordinary delay liability at £160,000, and required Northstar to notify Meridian of unusual downstream losses.

Problem

Northstar delivered six weeks late. Meridian bought emergency replacements at an additional cost of £90,000, lost £300,000 in ordinary production margin, and claimed £2 million for a cancelled export contract. Meridian also sought an injunction requiring Northstar to deliver remaining units, while Northstar argued that the delay clause was an unenforceable penalty.

Analysis

The six-week delay is an actual breach. If time was a condition or the consequences were sufficiently serious, Meridian might have had a termination right; otherwise it could claim damages while affirming. The emergency replacement cost is closely connected to the breach and likely recoverable if reasonable. The ordinary production margin may be recoverable if it was within the parties' reasonable contemplation and supported by evidence.

The £2 million export loss is more difficult. Meridian must show that Northstar knew of the export contract or the relevant special circumstances when contracting. If it did not, the loss may be too remote under the second limb of Hadley v Baxendale, even if the cancellation was factually caused by the delay.

The delay clause is assessed under the legitimate-interest and proportionality approach. A fixed weekly sum may compensate administrative disruption, scheduling risk and foreseeable delay costs. The fact that actual loss varies or is difficult to prove does not itself make the clause a penalty. The cap must then be construed: it may limit delay damages but not necessarily losses arising from a different breach, fraud or liability that statute prevents the parties from excluding.

An injunction compelling delivery depends on whether future units are unique and whether damages provide an adequate remedy. If equivalent housings are available, damages are likely adequate. If Northstar's units are technically unique and substitution would jeopardise regulatory approval, specific relief becomes more plausible, subject to supervision and Meridian's readiness to perform.

Outcome

On the assumed facts, Meridian has a strong claim for the reasonable replacement cost and possibly ordinary production loss. The export claim is likely to fail unless the special risk was communicated. The delay clause may be enforceable, but its interaction with the cap requires careful construction. An order compelling future delivery is uncertain and would depend on uniqueness, urgency and whether a damages remedy is adequate.

Learning points

The case demonstrates that a breach analysis is not a single calculation. Classification, election, causation, remoteness, mitigation, contractual drafting and equitable discretion must be considered together. Early disclosure of unusual risks and contemporaneous mitigation evidence can materially change the outcome.

9. Professional practice, governance and contemporary issues

Commercial lawyers should advise clients before breach occurs, not merely after litigation begins. Contracts should identify performance milestones, acceptance procedures, notice requirements, cure periods, service credits, liquidated damages, caps, exclusions and dispute-escalation mechanisms. Parties should document market conditions and the basis for any agreed sum.

When breach is suspected, the client should preserve records, avoid casual communications that amount to election, review termination rights, obtain substitute quotations, notify relevant risks, and calculate loss using a transparent counterfactual. A board should consider liquidity, supply continuity, regulatory exposure, reputational consequences and whether litigation threatens a strategic relationship.

Digital contracting and AI-assisted performance monitoring create new evidential and governance questions. Automated notices may trigger contractual deadlines; algorithmic forecasts may support but should not replace human verification of loss; and data used to prove lost profits must be authentic, explainable and properly retained. AI-generated contract summaries can miss governing-law clauses, limitation provisions or conditions precedent. Professional responsibility remains with the lawyer and client.

Ethically, a claimant must not inflate loss, conceal a substitute transaction, destroy adverse records or use an injunction merely to obtain commercial leverage. A defendant should not manipulate performance data or invoke a penalty clause as a deterrent unrelated to legitimate protection. Proportionality, candour and accurate disclosure are central to responsible dispute management.

Challenges and limitations

Remedies law contains unavoidable uncertainty. Market prices may fluctuate between breach and substitute purchase. Lost-profit models depend on assumptions about demand, capacity and causation. A claimant may face concurrent causes, insolvency, contractual caps or difficulties proving what would have happened in the counterfactual world. Equitable relief is discretionary and cannot be predicted by arithmetic alone.

There are also conceptual limits. Expectation damages do not guarantee the claimant a risk-free profit; reliance damages do not automatically reimburse every expenditure; restitution does not simply transfer the defendant's entire gain; and a liquidated-damages clause does not remove the need to construe the contract. Good advice therefore combines doctrinal analysis with commercial evidence and realistic litigation assessment.

Chapter Summary

Breach may be actual, anticipatory or repudiatory. A repudiatory breach gives the innocent party an election: accept and terminate, or affirm and continue. Wrongful termination is itself a serious breach. Damages ordinarily protect the expectation interest, but reliance and restitution may be relevant where expectation is difficult to prove or where a benefit must be reversed. Consequential losses require factual causation, legal responsibility, reasonable foreseeability, proof and mitigation. The Hadley rule limits remote losses, especially unusual profits not communicated when the contract was made.

Liquidated damages are enforceable where they protect a legitimate interest without imposing an extravagant or unconscionable detriment; penalties are not. Exclusion and limitation clauses must be construed carefully and tested against statutory controls. Specific performance and injunctions are discretionary responses used when damages are inadequate, while restitution addresses unjust enrichment or failure of consideration. Effective professional advice integrates classification, election, evidence, calculation, contractual allocation and ethical conduct.

Key Terms

Breach: Failure to perform a contractual obligation.

Actual breach: Breach occurring when performance is due.

Anticipatory breach: Clear refusal or inability to perform before the due date.

Repudiatory breach: Breach or conduct permitting the innocent party to terminate.

Condition: A fundamental contractual term whose breach permits termination and damages.

Warranty: A term whose breach normally gives rise to damages but not termination.

Innominate term: A term classified by the consequences of its breach.

Affirmation: Election to keep the contract alive after repudiation.

Termination: Ending future contractual obligations because of a qualifying breach.

Expectation damages: Damages protecting the value of the promised performance.

Reliance damages: Damages reimbursing reasonable expenditure incurred in reliance.

Restitution: Reversal of unjust enrichment or failure of consideration.

Causation: The connection between breach and claimed loss.

Remoteness: The legal limit on recoverable types of loss.

Mitigation: Reasonable action to reduce loss after breach.

Liquidated damages: Contractually stipulated compensation for specified breach.

Penalty: A disproportionate secondary detriment imposed for breach.

Specific performance: An order requiring contractual performance.

Injunction: An order restraining or compelling conduct.

Cross-undertaking in damages: Promise to compensate if interim equitable relief proves unjustified.

Review Questions

Short Answer Questions

1. What is the difference between actual and anticipatory breach?
2. What choices are available to a party facing repudiatory breach?
3. State the two limbs of the rule in Hadley v Baxendale.
4. What is the purpose of mitigation?
5. When is specific performance generally more likely than damages?

Long Answer Questions

1. Explain the distinction between conditions, warranties and innominate terms, using leading authority.
2. Compare expectation, reliance and restitutionary remedies, including their limitations.
3. Discuss causation, remoteness and mitigation in a commercial damages claim.
4. Explain the modern approach to liquidated damages and penalties.
5. Analyse the principles governing specific performance and injunctions.

Analytical / Application Questions

1. A supplier repudiates a contract three weeks before delivery. The buyer immediately purchases equivalent goods at a higher price but later claims lost profits from a special contract that was never disclosed to the supplier. Advise the buyer on termination, replacement cost and the special profits.
2. A construction contract contains a fixed daily sum for delay. The sum is substantially greater than the owner's average historical loss, but the project is commercially critical and delay may cause difficult-to-measure disruption. Analyse whether the clause is likely to be a penalty.
3. A company seeks an injunction requiring delivery of unique components, while the supplier argues that money would be adequate and that the buyer has delayed seeking relief. Apply the principles governing interim injunctions and specific performance.

Multiple Choice Questions with Answers

Question 1

Which event most clearly constitutes anticipatory breach?

A. A buyer complains about a minor defect after delivery

B. A seller expressly refuses to deliver before the delivery date

C. A buyer pays the price on the agreed date

D. A party performs exactly according to specification

Correct Answer: B. A seller expressly refuses to deliver before the delivery date

Question 2

What is the normal purpose of expectation damages?

A. To punish the defendant

B. To reverse every benefit received by the defendant

C. To place the claimant in the position it would have occupied upon performance

D. To reimburse only litigation expenses

Correct Answer: C. To place the claimant in the position it would have occupied upon performance

Question 3

Under the rule in Hadley v Baxendale, unusual losses are generally recoverable when they:

A. Are mentioned only after the breach

B. Were communicated or within the parties' reasonable contemplation at contracting

C. Are mathematically difficult to calculate

D. Result from any breach, regardless of knowledge

Correct Answer: B. Were communicated or within the parties' reasonable contemplation at contracting

Question 4

A buyer replaces 500 units at £14 each instead of the contract price of £10 each. Ignoring other losses, what is the price-difference loss?

A. £500

B. £1,000

C. £2,000

D. £7,000

Correct Answer: C. £2,000

Question 5

Which statement best describes mitigation?

A. The claimant must take every conceivable step to avoid loss

B. The claimant must take reasonable steps to reduce loss

C. The claimant can never recover costs of attempted mitigation

D. Mitigation automatically eliminates the defendant's liability

Correct Answer: B. The claimant must take reasonable steps to reduce loss

Question 6

Which case is associated with the modern legitimate-interest approach to penalties?

A. Cavendish Square Holding BV v Makdessi

B. Donoghue v Stevenson

C. Carlill v Carbolic Smoke Ball Co

D. Entores v Miles Far East Corporation

Correct Answer: A. Cavendish Square Holding BV v Makdessi

Question 7

Specific performance is most likely where:

A. The claimant wants to punish the defendant

B. The subject matter is unique and damages are inadequate

C. The claimant has delayed indefinitely

D. The contract requires constant personal supervision

Correct Answer: B. The subject matter is unique and damages are inadequate

Question 8

What is the primary function of restitution?

A. To protect the claimant's expected profit in every case

B. To reverse unjust enrichment or failure of consideration

C. To impose a penalty for late performance

D. To replace all equitable remedies

Correct Answer: B. To reverse unjust enrichment or failure of consideration

Question 9

In an interim injunction application, which question is associated with American Cyanamid?

A. Was the contract formed by an advertisement?

B. Is there a serious question to be tried?

C. Was consideration adequate?

D. Is every loss too remote?

Correct Answer: B. Is there a serious question to be tried?

Question 10

In the worked supply example, the net expectation loss was calculated by adding replacement and transport costs and then:

A. Adding avoided costs

B. Ignoring all market prices

C. Deducting avoided costs

D. Doubling the contract price

Correct Answer: C. Deducting avoided costs