To what extent is the claimant's 'performance interest' protected by the remedies available in English law for breach of contract?

Another problem with this measure is finding the 'current market value' of the subject matter of the contract. Under s.50 (3) of the SGA:

"Where there is an available market for the goods in question the measure of damages is prima facie to be assessed by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the time of the refusal to accept."

For example in Thompson v. Robinson - the sale of a second hand car, the defendant tried to argue that there was no loss since the market value of the car was still the same. However, the Court found that there was no 'market' for this type of car, there were no more buyers, therefore the claimant had lost his profit on the transaction. Notably in Chater v. Sullivan the Court took a completely different view and found that there was a 'market' for the car involved in this case and so when the claimant sold the car to someone else, he had mitigated his loss completely, also in Lazenby Garages the subsale by the claimant meant he could not recover damages - however cross reference this with Slater v. Hoyle where the subsale was not held to be mitigating the claimant's loss because he was not obliged to sell the cotton to someone else. Thus, although this measure provides some protection to the claimant's performance interest it entails many uncertainties, and as the case law shows, the Courts do not really know how to deal with them.

Another measure adopted by the Courts when the 'difference in value' measure is wholly inadequate (eg the claimant is not contracting for profit) is the 'cost of cure' measure. This allows the claimant to be awarded damages representing the cost of 'curing' the breach of the contract and so still protecting his performance interest. An example of the Courts awarding this can be seen in Radford v. De Froberville where the breach made absolutely no difference to the property value and so the cost of curing the breach was thought to be more appropriate. However, the claimant cannot demand to be awarded the cost of curing the breach, in some circumstances it is utterly unreasonable (as in Tito v. Waddell (No.2)) or wholly disproportionate (Jacob & Young v. Kent) to the loss the claimant has suffered and so will not be awarded. However, the Courts still have difficulty with this measure in the sense that they sometimes adopt the non-conventional approach of looking into what the claimant is actually going to do with the damages awarded - and if he is not actually going to cure the breach with them then they tend not to award the amount.

Hence, the two principal methods adopted by the Courts in measuring damages pose a certain dilemma: sometimes it is inappropriate to fall back on the market value measure but at the same time the cost of curing the breach is wholly disproportionate to the loss suffered - thus certain claimants are not getting the level of protection by these remedies to truly represent their loss. This came to a head in Ruxley Electronics v. Forsyth where the builders took Mr F to Court to pay his bill (he had been alleging defects all the way through the contract). Just before the trial, Mr F noticed that the swimming pool was shallower than the depth specified in the contract and so wanted damages. The Judge found that the difference in market value was 0, whereas the cost of curing was £21,000 (more than the actual contract price therefore wholly disproportionate). This case went on appeal eventually to the House of Lords - Mr F wanted the cost of cure and the builders wanted the difference in market price - neither argued for what was eventually awarded - a figure representing loss of amenity (could not dive in the pool) of £2,500. This case provided a clever way of awarding 'middle-ground' damages between the 'difference in value' measure and the 'cost of cure' measure and was subsequently used in Freeman v. Niroomand. However, problems still do exist with this measure, leaving an itch in the side of the claimant wanting 'performance interest' - the test of 'wholly disproportionate' could be said to unduly favour defaulting contractors; and what does the 'middle-ground' award actually represent - how is it measured? Many commentators say that the Judge in Ruxley just 'plucked a figure from the air' - this definitely does not provide any clear, certain ground for claimants wanting protection of their 'performance interest'.

In consequence, damages measured by the Courts do not entirely satisfy the needs of the claimant - the claimant's 'performance interest' is not 100% protected by these remedies and the ways in which they are measured. Also, as was the situation in Laverack v. Woods of Colchester, damages are assessed on the basis that the defendant would have performed his minimum legal obligation according to the terms of the contract. This can leave the claimant under-compensated and thus under-protected as this restriction means that the Courts measurements of damages are not realistically reflecting the 'loss' of the claimant. Adding to the lack of protection is the fact that remoteness issues often mean the claimant cannot truly recover his 'performance interest' if this entails something other than what arises 'naturally' from the breach or was in the contemplation of the parties (Hadley v. Baxendale). For example in British Colombia v. Nettleship the claimant could only recover the cost of replacing the lost machinery, despite the fact that the breach by the defendant (not delivering that piece of machinery) meant that the sawmill could not be erected. Hence, in the context of 'performance interest' remoteness will particularly effect the claimant's subsale - eg if a breach by the defendant prevents the claimant's subsale then this 'performance interest' will be held by the Court to be too remote unless the defendant knew of the subsale.

Aside from damages, the claimant's 'performance interest' can also be protected by the equitable remedy of specific performance. Traditionally, the Courts will order specific performance if the innocent party has a specific interest in performance which is not satisfied by damages. In more modern cases, the Courts have been inclined to award specific performance if such a remedy will 'do more perfect and complete justice than an award for damages'. Still, specific performance is a discretionary remedy; it does not follow that it will be granted because damages are not adequate compensation. The Court has a choice in the matter, it can consider whether it would be fair (on both sides) to grant the remedy. 'He who comes to Equity must come with clean hands', thus the Court will take into account that fact that the claimant's conduct has been tricky or unfair, or that the claimant has tried to take advantage of a mistake by the defendant. Also, as with the 'cost of cure' measure of damages, where the potential loss to the defendant is 'enormous, unquantifiable and unlimited, as well as being out of all proportion to any uncompensatable loss' suffered by the claimant, specific performance will not be granted. In contracts for the sale of land the claimant's 'performance interest' is nearly 100% protected through specific performance because as a general rule either party to a contract for the sale of land is entitled to sue for specific performance of the agreement. Although, despite these attributes, the remedy of specific performance does not cover certain contracts (those held not to be 'specifically enforceable) eg contracts of personal service and so it cannot be said that this remedy provides the adequate amount of protection to claimant's for their 'performance interest'.

Also, as stated in the opening paragraph, it must be noted that a certain branch of injunctions granted by the Court have the effect of essentially enforcing performance of the contract even where the contract is held not to be specifically enforceable. Thus, in Metropolitan Electric Supply Co Ltd v. Ginder, an express promise by the defendant to take the whole of his supply of electricity from the Company was held to import a negative promise that he would take none from elsewhere, and an injunction was accordingly granted. Although only a small gateway, this use of an injunction adds to the protection of a claimant's 'performance interest' by filling certain gaps in the specific performance remedy. On the whole, a number of remedies protecting the claimant's 'performance interest' are readily available but depending on the facts of the case will either be adequate or inadequate. Perhaps what needs to be considered, is not whether remedies are available, but whether the remedies that are available are being interpreted or measured correctly - maybe the Courts need to take a more realistic view of 'loss', combining it with 'loss of a bargain', 'loss of a chance' and certain elements of mitigation/subsale before trying to meet the needs of the claimant's performance interest.