Common Law Essay

1591 words - 6 pages

Business Law26th Intake/Semester 5/FLecturer: Mr Raymond FongDate of Submission: 24th April 2010Table of Contents




Three Major Aspects


Case Application


4.1 Applicable Law


4.2 Applications of facts to law


4.3 Conclusion




IntroductionCommon law system is originated in England in middle ages and laws are made by the judges based on the decisions made on the cases. Thus, common law is also known as case law. Decisions on past cases by superior courts are binding and authoritative for future cases handled by lower courts. Under common law, there is contract law which facilitates the transactions made between different parties especially businesses. When there is breach of contracts, remedies are required to solve the problems that are likely to happen. One of the major remedies is common law damages. The very first type of damages could have been Weregeld paid by killer of Saxons for homicides. However, as time passes, more types of damages are formed. In business world, damages are handled based on case laws and originated from different cases just as how common laws are formed. New rules and limitations are created from various cases with different scenarios and facts. For instance, Hadley v Baxendale (1854) set out the rules on the remoteness that determine which losses are claimable for the damages from the breach of contracts. Another example would be Dunlop Pneumatic Tyres Ltd v New garage and Motor Co. (1915) case that established guidelines to differentiate between liquidated damages and penalties.DamagesDamages is the main remedy when either one party breach the contract causing the other party to deal with the losses. Common law damages is to compensate the innocent party with the amount of money that would put him/her in the same position as he/she would have been if the contracts have been carried out properly as planned. The damages are granted if the broken contracts can be proved and liability is strict in contract law. However, the purpose of the law is not to punish the offender. Losses need to be analyzed properly before damages claims can be allowed. Damages can be either liquidated damages or unliquidated damages.Liquidated damages are certain sum of money pre-agreed by both parties for the losses they will suffer in the case of breach of contracts. In this case, the damages can be quickly and easily claimed without the requirement of court involvement.Unliquidated damages are compensatory damages when there is no prior agreement of damages if there is breach of contracts and the amount is uncertain. Unless the plaintiff can prove the loss, he will be entitled to the nominal damages only which mostly is just a dollar. The damages he claims will be just to compensate his loss and not the defendant's profits which he made by breaching the contract. For example, in the Surrey County Council v Bredero Homes (1993) case, a local authority sold the land to the...

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