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NSW Breach of Contract - Pay Full Refund?

Discussion in 'Commercial Law Forum' started by JohnPseudonym, 17 August 2015.

  1. JohnPseudonym

    JohnPseudonym Member

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    Hi! This one's about breach of contract and what damages are entitled to be recovered. Any sort of advice at all is very, very much appreciated.

    I believe there's a general principle that damages for breach of contract should not be punitive, but should restore plaintiffs to the original state they would have been in had the contract not been breached. I also believe that breach of one of the terms of a contract doesn't automatically rescind the contract.

    In this case, I'm clearly in the wrong. I was contracted to create a wedding video. In order to create it, I and another videographer were flown interstate the night before the wedding, provided a hotel room, a meal at the reception, and further accommodation for a few hours after the reception, before we flew back home very early the next morning. There was nothing explicit in the written contract about these expenses, and there was no agreement over the amounts, but the customer and I did agree verbally that he'd cover the airline tickets, that he'd provide some sort of accommodation (I told him I'd be happy with a lounge room floor), and I did tell him we'd appreciate food at the reception.

    The filming went fine, but the nightmare was the editing. I clearly breached a clause relating to deadline -- it was delivered a very long time past what we'd initially agreed.

    Now, the customer has so far paid me $600, which amounts to 50% of what we initially agreed, and I'm not going to ask that he pay the remainder. But, understandably angry, he wants to claim, as a consequence of my breach of contract, not only a refund of the $600 he's paid me so far, but out of pocket expenses for the airline ticket, the hotel room, and the meals, which he says amounts to a further $900.

    I guess the issue is that, while I'm happy to pay him something, to try to appease him, it would be a huge struggle to pay him the full amount he claims; I don't have that sort of money.

    Given that he sustained no financial loss by late delivery of the video, and in fact did finally receive the goods, I don't know if it's fair that he receive a full refund. I also find the request to cover all the extra expenses unreasonable, given that I'd regard the amounts themselves as exorbitant (for instance, a claimed $300 for food), and given that I believe it's relevant that they were necessarily incurred in the course of the filming portion of the job; ie, I don't believe that paying them would restore the plaintiff to the state he would have been in had the contract not been breached.

    Should I pay him? Or is the amount of damages worth arguing over? Do I have any sort of arguable case?

    Thanks very much for your time!
     
  2. John R

    John R Well-Known Member

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    Hi @JohnPseudonym,
    You mention that you "clearly breached a clause" but I can't find mention of a written contract that was agreed to (and what else it may have said)?
    Was the agreement verbal and/or a series of emails with high-level terms only?
     
  3. JohnPseudonym

    JohnPseudonym Member

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    Hi John, thanks for the reply. There was a written and signed contract, and the relevant clause was to do with deadlines.
     
  4. JohnPseudonym

    JohnPseudonym Member

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    I guess for me, who knows nothing at all about law, the matter is about whether the plaintiff gets restored to the state he would have been in had the contract not been breached (in which case, I think the damages he can claim are quite limited), or the state he would have been in had the contract not been entered into at all (in which case, perhaps he can claim the disbursements). Is that fair to say? If so, what would the difference turn on? Would it be an issue, for instance, of whether the deadline clause is essential, such that the plaintiff would not have entered into the contract had he known in advance it might be breached? And surely the fact he actually received the goods is of some relevance?

    I also don't know whether some sort of consumer law applies to the situation, or whether it's a matter of contract only.
     

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