In the following two situations, advise the Employer with respect to entitlement of delay damages: a. The Employer, Eastfield Retail Developments, has included a liquidated damages rate of $500,000 per week in the building contract for a $5 million shopping centre refurbishment project. The contract completes the works 3 weeks late. Eastfield is claiming $1.5 million in liquidated damages. (4 marks) LDs must be a genuine pre-estimate of loss - not extravagant or unconscionable when compared with the greatest loss that could have occurred Dunlop v New Garage, Leighton v State of Tasmania $500k per week would appear to be out of all proportion and, therefore, void. Employer only entitled to claim general unliquidated damages. b. A construction contract for an office development states that "Zero dollars" liquidated damages are to be paid by the Contractor for each day beyond the practical completion date stated in the contract. The Contractor claims that the Employer is entitled to no damages whatsoever in compensation for late completion cause by the Contractor. (4 marks) Employer still entitled to claim general, unliquidated damages There must be clear and express, unambiguous language stated in the contract for an employer to waive his rights to a damages claim altogether J-Corp v Mladenis Question 2 Q2(i) Dave is likely to succeed in an action for breach of contract against Crash. Crash made an offer bin their email of 20 April, which Dave accepted before the deadline of 5pm on 25 April. Dave emailed his acceptance to a designated email address - under the Electronic Transactions Act, acceptance is deemed to occur when email arrives in Crash's inbox. This is subject to sound business practice and common sense. As 1p is within normal business hours, the acceptance will be deemed to have occurred at 1pm on 24 April. Crash has not revoked their offer. Crash has breached the contract formed with Dave by selling the mixer to another party. Q2(ii) To be allowable, damages must not be too remote from the breach which caused them. Accordingly to the principles set down in Hadley v Baxendale, damages are not too remote and may be claimed if they: o Naturally flow from the breach of contract; or o Are reasonably within the contemplation of the parties at the time of contract formation. In this question: o The extra cost of purchasing another mixable naturally flowed from the breach (i.e., was reasonably foreseeable) o The 1 week hire charges were within the reasonable contemplation of Crash because Dave let Crash know that he needed the mixer for an urgent job. Therefore, it is likely these 2 sets of damages will be claimable. Q2(iii) Highly unlikely that hire costs for 6 months will be claimable by Dave for 2 reasons: o Damages are too remote o Dave is under common law duty to mitigate loss (Brace v calder)