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    Laws and Regulations of Contract Law and their Consequences

    Question :

    This assessment will cover following questions:

    • Explain the damages in the breach of contract.
    • Howe damages is defined and what the recoveries that allowed for damages.
    Answer :


    Contract Law is simply defined as the law where different parties are involved for the common purpose so that terms and condition of an agreement can be completed. The most important thing which is needed to be focused is that whenever any of the party enters into the contract then in that respective situation terms and condition must be followed. In this types of law, the problematic situation only arises in the situation where it is found that any one of the involved party didn't perform their part of work as per the requirement. Here, in this file, the main topic will be discussed in detail will be related with laws and regulations of contract law and what are the consequences when breach of contract create mental distress. Also, several cases will be discussed to understand the file in detail.


    Explain the purpose of damages for breech of contract.

    Talking about the contract law, it is the most crucial law for any of the sector because it the only source through which two or more then two party can create legal relation with each other. It is necessary to understand that non of the party has the right to breach the contract once they enter into the contract. If it is found that contract has been breached then legal actions can be taken.

    Breach of Contract is the situation where one of the contracted party fails to perform their part of work and it is also needed to understand that if that happens then legal actions can be taken on defaulter. The primary object of any of the breach of contract is the compensate the plaintiff but there is no saying that defaulter should be punished. Whenever there is a breach of contact then defaulter party is compensated but there are some of the cases compensate is not possible such as in the cases of mental distress[1]. It is said that mental distress is one of the major problem where giving compensation is not an easy task.

    The main purpose of providing the damage for the breach of contract is to provide the benefit to the one who has been involved in the contact. There are number of situation where people have to suffer, once they enter into the contract so for the purpose of improving the result between the contracted party, the term damages for the breach of contract has been introduced. But, in any of the breach of contract cases, decisions are not declared directly as proper investigation is required. In addition, the purpose of damages for the breach of contract is very simple where it doesn't want to allow any of the party to fall in the situation due to which chances of breach can occur within the contract. If problem still occurs, then damages should be be given which is the main purpose of damages for the breach of contact.

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    As per the view of Robinson v Harman (1848) is one of the case which took place in the year 1848. Here, main problem was related with the breach of of contract where Harman breached the terms and condition. In facts, Harman wrote to Robinson about the lease of dwelling house in Croydon. As both of the them agreed on the terms and condition. After certain time Harman refuges to enter into the contract. It was the situation where Robinson had to suffer just because of the problem which were created by Harman.

    In this cases, the judges of court want to explain that Harman will have to pay the amount which has been given by Robinson but in addition, it was also necessary that damages must be paid off. Damages includes all of the expenses and time which was incurred by Robinson within the case will be required to paid off by the defaulter. In simple words, it was one of the famous case which is willing to explain that if in any of the situation breach of contract occurs in the case then in that particular situation it will be important for defaulter party to compensate the innocent party who was involved within the case.

    How damages are defined.

    Damages can be defined as the way in which one of the party has to suffer just because of the work performed by the another party. Whenever any of the person has to suffer from the damages, then in that particular situation the person who was the main reason behind the the occurrence of damages has to compensate the party[2]. Here, compensation should be done to the party who has to suffer from the losses. It falls under the category of civil wrong. Damages are mainly awarded in the condition where two part enters into the contract or else it can been seen within tort law.

    Recovery of damages for breach of contract

    Whenever in any of the situation, situation of breach of contract occur, it becomes necessary for the party to compensate the innocent party. Talking about the recovery of the breach of contract, it is needed to understand that contract law doesn't allow any of the party to breach the terms and condition. For the purpose of recovering the damages, party has to file the case in the premisses of court. Then, there is the requirement for the court to check the how was the main person due to which problem related to breach of contract has occurred. Then, according to the damages which has been faced by the innocent party total calculation is needed to be done. Finally, decision is required to be declared so innocent party will get the opportunity to recover the amount of losses which he/she has to bear while performing their part of work in the contact. It is the complete procedure which is needed to be followed by the party for the purpose of recovering the damage amount from the defaulter party.

    Refusal for awarding damages for mental distress -Addis v Gramophone (1909) -look in to the case and explain the case .Addis rule ?

    It is necessary to understand and find that what are the situation where rewards for the breach of contract can be given. It is just because so that plaintiff has to not suffer in future period of time. In context of the file, contract law simply explains that loss and damages can only be recovered in the form of monetary term[3]. But, there are number of situation where monetary compensate is not possible such as mental distress and many more. Even court faces problem to declare that what can be possible solution at the time where breach of contract develop the concept of mental distress.

    As it is never an easy task for any of the person to give compensate for the mental distress, it has been refused to give any of the compensate amount to the person where they faces the problem related to mental distress in breach of contract. Law explains that compensation can be done only in the situation where monetary losses has been suffered by the involved parties. But, if in any of the situation default has to face the problem related to mental distress then it is not possible to do compensate. There are some of the case which can be helpful for the purpose of understanding the situation in detail and those cases has been discussed below:

    Addis v Gramophone (1909) was the case which was filed by Addis where he was trying to explain that his reputation and ability has been challenged because Addis as removed from the his managerial post and another person was appointed.

    In this case, judges of the court where although confused but at the end of the day they came with the solution in which it was important for Addis to understand that they just had the option to claim for loss of wages and no prior notice was given by the company before removing from the post[4]. But, the requirement which are being asked by Addis Gramophone is not able to complete in any of the situation.

    From the above discussed case, it is very easy to understand that any of the person can be compensated but they are not able to compensate them whenever they want to explain that compensate should be on the basis of metal distress faced by the innocent party. In number of cases related which are related to the breach of contract there may be circumstances of malice, fraud, defamation, or violence, which would sustain an action of tort as an alternative remedy to an action for breach of contract.

    Talking about the Addis Rule, it was the rules which was introduced from one the case which took place between  Addis vs Gramophone. This rule simply tries to justify that in any of the situation person can only be compensate for the the damages which they suffered but in any of the circumstances they will not be paid any of the compensate amount or loss of damage amount. But, it cannot be paid for the mental distress.

    Recovery is allowed for damages

    Contract law is very crucial because it simply gives the idea that how any of the work is needed to performed. It is necessary to understand that while forming any of the contract that should not be formed in illegal manner because formation of contact in undesirable manner can create problem for the business organisation. Contract law says that if in any of the circumstances person fails to perform the work as per the requirement then in that respective situation breach of contract will be applied. In addition, compensate should be done on the basis of terms and condition prepared at the beginning.

     In one of the case which took place betweenHOBBS V LONDON AND SOUTH WESTERN RAILWAY COMPANY: 1875 wants to explains that there are number of circumstances where\ damages can be paid for personal inconvenience. In this case, HOBBS & family had to suffer just because of the default performed by the railway company[5]. Here, it was found that damages where just given on the basis of mere inconvenience but as HOBBS & family wants the compensation for disappointment, annoyance and loss of temper. But looking at the circumstances of case, Mellor J explained that damages cannot be given for the situation where people have to face the problem which is related to inconvenience, disappointment. And even judges where very clear towards their points while declaring the decision as they want to explain that sentimental are not acceptable and those types of damages is not possible to be given.

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     Failey v Skiner [2001] UKHL 49, is also of the case where plaintiff sued the defaulter for the breach of contract where he had to suffer from mental distress. Here, Failey has given clear instruction to Skiner that while searching the property he must give focus that aircraft noise should not be occurred. But, Skiner didn't perform his task as per the requirement.

    On this particular situation, Failey filed the case against Skiner to compensate for mental distress and Skiner didn't performed as per the promise. But Judges had decided that giving compensation on the basis of mental distress is not possible but there was the possibility that damages can be given on the ground of not fulfilling the basis requirement. So, on this respective ground Failey was awarded benefit of £10,000 as facing the discomfort[6].


    In any of the case, there are some of the expectation and even in the contract law, there are some of the exceptions. It is said that it is quite compulsory for any of the party to follow the laws and regulation where contract law simply explains that whenever situation of breach of contract will occur then damages should be paid by the defaulter party. But, there are some of the default performed by the defaulter very plaintiff suffers from the sentimental problem and in that respective situation it is not possible to compensate them. Although, giving compensation is not the solution in this types of cases but still there are some of the exceptions which has been explained with the help of cases.

    Watts v Marrow [1991]

    In this case, Watts filed the case against Marrow as Watts has informed Marrow to have detail survey on the property which he willing to purchase. After having the survey he informed to Watts that property was good enough to be purchased and it will be his benefit if he purchase the property. Once the property was purchased it was found that Watts has to suffer from lots of expenses to fix the property which he purchased where he had to suffer a lot. Looking at the situation of the case, it was found that Watts had to face the problem just because of the carelessness of Marrow. In this situation the judges of court decided that Marrow was one who is responsible for mental distress from which Watts has to suffer. It was one of the rear case damage was awarded for mental distress.

    Jarvis v Swan Tours Ltd [1973]

    It was the on of the case where contract had taken place between Jarvis and Swan Tours Ltd. Here, Swan Tours have promised to provide different kinds of benefits while enjoying the holidays with Swan Tours[7]. But, company was unable to provide the benefit which they must to provide due to which Jarvis has to suffer. Looking at the condition of the case, the court decided that if main purpose of entering into the contract is just for entertainment then in that respective situation Jarvis was awarded the for the damages as it was written within the law.

    Roxley v Forsyth[1995]

    Roxley was the one who filed the case because it found that Roxley informed Forsyth to built the swimming of seven feet and 6 inch but he built it the pool of six feet and nine inch. Here opinion of both the parties have been contradicted. It is one of the reason that Roxley want Forsyth to reconstruct the work[8]. The judges of the court declared that the opinion of all both the parties didn't meet with the terms and condition of the contract due to which it is necessary for Forsyth to rebuilt the swimming pool. Even, all of the expenses are required to be bear by Forsyth only.

    From the above discussed cases, it can be made clear that there are some of the situation where cases can be filed and in that respective situation even decision can be declared in favour of mental distress as well. But, there is very less probability where it can be seen that damages are being given for the mental distress. In short, only damages for monetary terms can be rewarded but some of the exceptions will be there where decision will be taken on the basis of situation.


    From the above file, it can be concluded that contract law is vital law which guides the business organisation that how any of the legal agreement can be formed. Breach of contract create issues for the defaulter where it is necessary for them to compensate the innocent party. Damages should be paid including all of the expenses which has been incurred by plaintiff. It is necessary to understand that damages can only be given for the cause of monetary losses as mental distress are never included in it.

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