96 6: Breach of contract and remedies Part B The law of obligations
Jarvis v Swan Tours 1973
The facts: The claimant entered into a contract for holiday accommodation at a winter sports centre. What
was provided was much inferior to the description given in the defendant's brochure. Damages on the basis
of financial loss only were assessed at £32.
Decision: The damages should be increased to £125 to compensate for disappointment and distress
because the principle purpose of the contract was the giving of pleasure.Alexander v Rolls Royce Motor Cars Ltd 1995
The facts: The claimant sued for breach of contract to repair his Rolls Royce motor car and claimed
damages for distress and inconvenience or loss of enjoyment of the car.
Decision: Breach of contract to repair a car did not give rise to any liability for damages for distress,
inconvenience or loss of enjoyment.5.3 Cost of cure
Where there has been a breach and the claimant is seeking to be put in the position they would have been
in if the contract had been performed, by seeking a sum of money to 'cure' the defect which constituted
the breach, they may be denied the cost of cure if it is wholly disproportionate to the breach.Ruxley Electronics and Construction Ltd v Forsyth 1995
The facts: A householder discovered that the swimming pool he had ordered to be built was shallower
than specified. He sued the builder for damages, including the cost of demolition of the pool and
construction of a new one. Despite its shortcomings, the pool as built was perfectly serviceable and safe
to dive into.
Decision: The expenditure involved in rectifying the breach was out of all proportion to the benefit of such
rectification. The claimant was awarded a small sum to cover loss of amenity.5.4 Mitigation of loss
In assessing the amount of damages it is assumed that the claimant will take any reasonable steps to
reduce or mitigate their loss. The burden of proof is on the defendant to show that the claimant failed to
take a reasonable opportunity of mitigation.Payzu Ltd v Saunders 1919
The facts: The parties had entered into a contract for the supply of goods to be delivered and paid for by
instalments. The claimants failed to pay for the first instalment when due, one month after delivery. The
defendants declined to make further deliveries unless the claimants paid cash in advance with their orders.
The claimants refused to accept delivery on those terms. The price of the goods rose, and they sued for
breach of contract.
Decision: The seller had no right to repudiate the original contract. But the claimants should have
mitigated their loss by accepting the seller's offer of delivery against cash payment. Damages were limited
to the amount of their assumed loss if they had paid in advance, which was interest over the period of pre-
payment.The injured party is not required to take discreditable or risky measures to reduce their loss since these
are not 'reasonable'.