Contract Law Analysis Narrative Essay Example

outlined benefits. Enforcing contracts within a specific timeframe is crucial since evidence and signatures can vanish over time. Therefore, any claims pertaining to contract violations must be submitted within a designated period.

The "limitation period" is the time limit established by a "statute of limitations" for initiating legal proceedings. In the case of non-real estate contracts, this period usually lasts six years after the breach occurred, implying that legal action must be taken within it.

The Statutes of Limitation protect contractors from debtors who disappear by resetting the limitation period clock for debt collection when partial payment is made. Time limits for legal action in real estate contracts differ by province and have unique rules. Contract claims typically only allow recovery of financial losses, while non-pecuniary losses are generally not recoverable even if they result in disappointment, inconvenience, or distress due to a breach of contract.

The rule that prohibits recovering damages for distress caused by the nature of a dismissal stems from the House of Lords decision in Addis v Gramophone Co. Ltd [1909] AC 488. This ruling established that damages can only be recovered when the distress is directly caused by the breach, rather than as a consequence of the dismissal itself. However, in Perry v Sidney Phillips ; Son [1982] 1 WLR 1297, it was decided that damages can be awarded for distress resulting from physical inconvenience caused by the breach. The principle was also applied in Watts v Morrow [1991] 1 WLR 1421, where it was determined that damages could be awarded for distress caused by the inconvenience of living in a property during repairs. Nevertheless, this case also recognised that

public policy limits general liability for contract breaches leading to 'distress, frustration, anxiety, displeasure, vexation, tension and aggravation, except for two significant exceptions.

One of the objectives of a contract is to provide pleasure, relaxation, or peace of mind. If the performance does not meet the contractually specified standard, damages for distress may not be available according to Watts v Morrow. However, Farley v Skinner (No.2) [2000] PNLR 441 highlights an exception when a surveyor failed to adequately assess the impact of aircraft noise on a property. If physical inconvenience is a result of the breach, and there is mental suffering directly related to that inconvenience and discomfort, damages may be available. The surveyor in the case was instructed to report on the matter as it was specifically relevant due to the house's proximity to the airport. This separated it from the general nature of the surveying contract.

When a contract is designed to provide a benefit other than monetary gain, compensation for the loss of that benefit can be warranted in cases where disappointment occurs. These exceptions typically address the distress resulting from the breach rather than the specifics of the breach itself. For example, in Jarvis v Swans Tours Ltd [1973] QB 233, the plaintiff reserved a winter holiday as advertised by the defendants in their brochure, which stated the holiday would be like a 'houseparty' with great entertainment and proper skiing facilities. However, the skiing facilities were inadequate, the entertainment wasn't special, and during the second week, the plaintiff was the only attendee of the 'houseparty'.

According to the Court of Appeal, the plaintiff was entitled to not only the cost of his vacation, but

also an equal amount as compensation for the disappointment and loss of entertainment he experienced due to the brochure's promises not being fulfilled. Lord Denning emphasized that the plaintiff didn't just purchase travel and accommodation, but had also expected to have a good time, which he deserves compensation for. In some cases, courts award damages based on the cost of fixing the initial problem despite the small difference in value, which meets the claimant's particular expectation or 'consumer surplus'. Lord Mustill in Ruxley Electronics and Construction Ltd v Forsyth [1996] 1 AC 344 recognized the need to 'cater for those occasions where the value of the promise to the promisee exceeds the financial enhancement of his position which full performance will secure'. Lord Lloyd believed that a small award would be sufficient compensation for loss of amenity, catering to the owner's subjective appreciation of a contract's benefit in this instance.

In commercial contracts, courts have consistently denied claims seeking damages for disappointment and distress. This was also the case in Hayes v James ; Charles Dodd [1990] 2 All ER 815, where the reason for disallowing the claim was a matter of policy. The policy sought to limit recovery for mental distress to specific categories of contracts where providing peace of mind or relief from distress was a central obligation.