law

[was786]

Posh Ltd., a business which hired out limousines for special occasions, ordered a new limousine from Charles.It was to be delivered on 1st. May ready for the start of the summer wedding season.The contract provided for the payment of agreed damages of �2,000 per week for each week by which delivery was delayed.

The limousine was not delivered until 1st. July. As a result, Posh Ltd. lost hire fees of �1,000 per week for seven weeks, and a fee of �3,000 agreed with a local celebrity to service his daughter's wedding during the eigth week. Posh Ltd. now claim damages for breach of contract.

Advise Charles how much he will have to pay.

[bednobs]

its 14000 isnt it or am i beng thick? seven weeks at 2000 per week =14000
cannot sue for breach of contract as delay seems to have been built into the contract

[cassa333]

Which is a �4000 profit...

[lawsanass]

I agree with bednobs.......it may be a �4000 profit on what would have been earned by Posh but charles should not have agreed to the conditions..... his loss. Posh cant claim damages for breach of contract, been no breach unless charles refuse to pay. Posh can only apply for the agreed �2000 per week......surely....?

[Eve]

Just brainstorming to try to give you some more things to think about (what I've said may be right or not) so you can do some of your own homework :)

Bear in mind the level you are at though and put the question in context accordingly as to the areas you have studied or should have studied eg definition of contract, breach of contract, contractual remedies...make sure you apply everything to the facts.

To follow:

[Eve]

Was the contract was performed in that an offer was made and accepted, assume consideration paid, vehicle was delivered (was there a date the contract was condition upon - 1st May?).

Is there a breach of contract if the compensation provided for under the contract is paid?

�2,000.00 per week (note it says damages rather than penalty) x 8 weeks (if calculated that way) = �16,000.00

As the contract specified damages then is he entitled to claim for further damages as damages were pre-set? Would that be just and equitable?

Was there an indemnity against further action for damages in the contract? Would it be effective?

Can it be classes as damages under a contract or is more of a penalty clause?

Should the contract have been negotiated with a penalty clause leaving it open for further damages to be claimed ie the loss incurred (�7,000.00 and �3.000.00 = �10,000.00). The liability be mitigated?

As there was a clause providing for for late delivery is this an indication that this was a feasible possibility and, therefore, should there have been reliance on it? What was the intention behind the clause? Or, should it have been delivered by the first of May.

Could there be a claim for more than percuniary loss eg loss of profit (on reliance)? Damage to reputation etc...?

Is the contract term fair? It was agreed to. Does that matter?

If additional payment had been already agreed for late delivery, would this presume that it was an amount agreed to cover loss caused by late delivery and, if so, should Posh Ltd be entitled to claim for more?

If they are should the additional "compensation" be deducted?

[Eve]

Contractual compensation = �2,000.00 per week x 8 weeks = �16,000.00

Actual loss = �7,000.00 and �3.000.00 = �10,000.00

If he is paid the contractual compensation, what has he lost?