Terms, Frustration & Remedies

Question 1

Hadley v Baxendale (1854) — two limbs of remoteness?

Accepted Answer

Damages are recoverable for loss (1) arising naturally from the breach, or (2) reasonably in the contemplation of both parties at the time of contracting as the probable result of breach. (Source: (1854) 9 Exch 341)

Question 2

Taylor v Caldwell (1863) — doctrine?

Accepted Answer

Frustration: the contract was discharged when the music hall was destroyed by fire before the performance dates, through no fault of either party. (Source: (1863) 3 B & S 826)

Question 3

Krell v Henry [1903] — held?

Accepted Answer

The contract to hire a flat to view the coronation procession was frustrated when the coronation was cancelled, because the procession was the foundation of the contract. (Source: [1903] 2 KB 740 (CA))

Question 4

L'Estrange v F Graucob Ltd [1934] — principle?

Accepted Answer

A party who signs a contractual document is bound by its terms, whether or not they have read them (absent fraud or misrepresentation). (Source: [1934] 2 KB 394)

Question 5

Cavendish Square Holding v Makdessi [2015] — penalty test?

Accepted Answer

A clause is a penalty if it imposes a detriment out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. (Source: [2015] UKSC 67)

Question 6

Which statutes control unfair terms in B2C and B2B contracts?

Accepted Answer

Consumer Rights Act 2015 (consumer contracts) and Unfair Contract Terms Act 1977 (mainly business contracts). (Source: CRA 2015 Part 2; UCTA 1977)

1.Hadley v Baxendale (1854) — two limbs of remoteness?

2.Taylor v Caldwell (1863) — doctrine?

3.Krell v Henry [1903] — held?

4.L'Estrange v F Graucob Ltd [1934] — principle?

5.Cavendish Square Holding v Makdessi [2015] — penalty test?

6.Which statutes control unfair terms in B2C and B2B contracts?