Breach And Performance and Remedies

Question 1

What is the basic rule of performance - Performance and breach answers found on Moodle

Answer 1

The basic rule is that the performance must be exact and full, according to the requirements of the contract.

Question 2

Case that shows full performance - same as card 1

Answer 2

Cutter v Powell (1795)
Cutter was contracted to sail from Jamaica to Liverpool, the pay was 30 guineas provided he did his duty all the way to Liverpool. (this was higher than the usual rate) The ship set sail on 2nd August, Cutter died on 20th September and the ship got to Liverpool on 9th October.
His widow was unable to claim a proportion of his wages as he had not completed the voyage from Jamaica as he was contracted to do, the contract specified complete performance.

Question 3

Case that shows exact performance same as card 1 and law e-resources

Answer 3

Re Moore and Landauer (1921): Here tins of fruit were to be delivered in cases of 30. In fact they were delivered in cases of 24.
Held: The purchaser was entitled to reject the goods as they were not as described although the agreed overall number of tins was supplied.

Question 4

Exceptions to the rule that performance must be exact and full

Answer 4

Filler

Question 5

Performance may have been attempted C1 and law e-resources

Answer 5

Startup V Macdonald (1843)
Claimant had the last 14 days of the month to deliver oil; he did so on the last evening at 8.30 and was refused access because of the lateness of the hour. This enabled him to sue for payment as he had offered performance.

Question 6

The contract may be severable meaning and case C1

Answer 6

This means that it may be possible to split the contract into several smaller obligations, each of which can be seen as a contract in its own right.
Roberts v Havelock (1832)
A ship was docked for repairs while en route. Half way through the repairs the claimant asked for money for the work done so far. he was successful as the contract was seen as severable, the contract did not require him to complete all the repairs before the payment was due.

Question 7

The contract may be substantially performed meaning C1

Answer 7

If a small amount needs to be done, there can a claim for the price minus cost of finishing the work.

Question 8

Dakin V Lee (1916) C1

Answer 8

Builders carried out work to the defendant’s house. They departed from the specification in some minor ways, which could be remedied at minor cost. The builders were able to claim the price of the contract minus an allowance for the repairs still to be done.

Question 9

Bolton V Mahadever (1972) C1

Answer 9

The claimant installed central heating in the defendant’s house for £560. It did not work and poisoned the inhabitants with toxic fumes. The claimant was unable to claim the price of the work minus the cost of remedy, as there had not been substantial performance.

Question 10

There may be voluntary acceptance of partial performance C1

Answer 10

Sumpter v Hedges (1898)
Claimant did half a building contract then abandoned it and left the defendant to finish the work.
He claimed a quantum meruit (deserved amount) for the work he had done.
HELD he could not claim any money because the work was not substantially performance and the client had not given their consent to terminate the contract early.

Question 11

When does a delay allow the other side to terminate the contract?

Answer 11

Filler

Question 12

A specific date may be included in the contract C1

Answer 12

Union Eagle v Golden Achievement (1997) Privy Council
The purchaser of a flat had paid a 10% deposit of the $4.2million price. The contract stated that if the purchase was not completed by a specified deadline the seller would terminate the contract and the purchaser would lose their deposit. The purchaser was 10 minutes late and the seller refused to complete the sale.
HELD The terms were very clear and in a case like this certainty is most important – the purchaser lost their deposit and had no right to the flat.

Question 13

The parties may give notice during the period of the contract C1

Answer 13

Rickard v Oppenheim (1950)
Early in 1947 the defendant ordered a Rolls Royce car body, in July the claimants promised to deliver it in 6 or 7 months. After 7 months they had not made it and promised it to him in another 3 months. After this they still did not have it so he said that he would cancel the order if they did not have it in 4 weeks. After another 3 months the chassis was ready but the defendant refused to pay for it. HELD as he gave a time limit and then an extended time beyond that he was not in breach of contract and could refuse to take the chassis.

Question 14

Unless time is of the essence, delay is a breach of an innominate term C1

Answer 14

Astea Ltd v Time Ltd (2003) Technology and Construction Court
A company ordered some software to run their sales operations. After a long delay the clients cancelled the contract and sued for damages.
HELD the delivery date had not been made into a condition, no final notice had been given and the client had not lost substantially the whole benefit of the contract, therefore they were not entitled to repudiate.

Question 15

What is anticipatory breach C1

Answer 15

When a party says to the other that in the future they do not intend to perform their contract obligations.
What the parties can do is on the following cards

Question 16

Sue immediately C1

Answer 16

Hochster v De La Tour (1853)
The claimant was hired to work as a courier, to start in 2 months time. After one month they cancelled the contract and he sued for breach. Their defendant was that he could not sue until the time when the contract should have started.
HELD He could sue immediately as they had made it clear that they intended to breach the contract.

Question 17

Wait and see C1

Answer 17

If they do this they run the risk of losing their claim if it becomes frustrated.

Avery v Bowden (1856)
B was contracted to carry a cargo for A. When it became clear that A was not going to perform the contract (had no cargo for B to carry) B waited to see if the situation would change and A would in fact perform his obligations. Before the date due for performance a war broke out and the contract was frustrated. This relieved A from any further obligations, although B could have sued him before this time, because the war broke out while B was waiting they lost the right to sue.

Question 18

Go ahead and perform the contract anyway C1

Answer 18

White & Carter v McGregor (1962)
A contract provided that a company was to provide litter bins for a local council that was to be paid for by advertising on the bins. They contracted with a business to have adverts on the bins however the business backed out of the arrangement before the adverts were prepared. The response of the bin company was to ignore this breach and continue with the contract, placing the adverts on the bins anyway.
HELD they were entitled to claim the price of the contract.

Question 19

Remedies

Answer 19

Filler

Question 20

Damages meaning Week 6 remedies

Answer 20

Damages means money. This is a common law remedy, what this means is that if you are entitled to damages it doesn’t matter if this would lead to a harsh or unfair outcome, the court has no discretion.
Damages can be claimed for financial losses that result from non-performance and this can include loss of profits and any physical damage or harm.
If there is no actual loss there can be no claim for damages for breach of contract.

Question 21

Orders meaning W6R

Answer 21

Orders are things like specific performance and injunctions. These are equitable remedies, this means the court has some discretion and would not award them if it would be unfair in the circumstances.

Question 22

When damages can not usually be claimed

Answer 22

Filler

Question 23

Damages can not usually be claimed for mental distress in a commercial contract W6R and law e-resources

Answer 23

Addis v Gramophone Co Ltd (1909)
The claimant was employed as a manager by the defendant. Shortly afterwards they sacked him and replaced him with a new manager.
The manager was entitled to damages for loss of pay but not for disappointment or damage to his reputation.
What was held by law e-resources - Contract law seeks to put the parties in the position they would have been in had the contract been performed. He was therefore limited to claiming wages and loss of commission during the contractually agreed notice period. There was no right to exemplary damages or damage to reputation in contract claims. Such claims would have to be actioned in the law of tort.

Question 24

When can they claim for mental distress in a commercial contract W6R

Answer 24

Although they can if the main point of the contract is pleasure
Farley v Skinner.
Farley contracted with Skinner for Skinner to survey a potential house for aircraft noise, Skinner concluded that aircraft noise was unlikely.
After moving in Farley discovered that the house was directly under Gatwick airport’s circuit. He could claim damages for inconvenience because that was the point of the contract.

Question 25

The losses suffered must have been those which arise naturally or would have been within the contemplation of the parties W6R

Answer 25

Hadley v Baxendale (1854) The crankshaft broke in the Claimant’s mill. He employed the Defendant to take the crankshaft to be repaired and then return it afterwards. The defendant was negligent and the crankshaft was returned 7 days late. The Claimant was unable to use the mill during this time. The claimant sued for loss of profit. The Defendant argued that he was unaware that the mill would have to be closed during the delay and therefore the loss of profit was too remote. Held: damages can be claimed for losses which may reasonably be supposed to have been in the contemplation of both the parties at the time the contract was made, or which had actually be communicated. Here the losses were not claimable as the defendant was not aware of the consequences of bring the shaft back late.

Question 26

Any unusual losses must have been within the contemplation of the parties W6R

Answer 26

Victoria Laundry v Newman (1949) The claimant purchased a large boiler for use in their dying and laundry business. The defendant was aware that they wished to put it to immediate use for their business. The delivery of the boiler was delayed in breach of contract. This meant the laundry could not complete their normal business and they lost out of a particularly profitable dying contract Held: The claimants could only recover losses which were in the reasonable contemplation of the parties which included the loss of profit that could be expected from the lack of use of the boiler, but the claimant could not recover for the loss of the exceptionally profitable contract since the defendant was unaware of it.

Question 27

What must the parties do and what may it lead to W6R

Answer 27

The parties are under a duty to mitigate, this may mean there is no claim at all. This was shown in the case British Westinghouse Electric v Underground Electric (1912) A contract to provide new turbines was breached where the turbines were faulty The buyers replaced them with new turbines which were so efficient that they led to savings that were greater than the cost of the replacement turbines The buyers sued for the cost of the new turbines but lost because in mitigating their loss they had effectively suffered no losses at all – awarding damages would have led to unjust enrichment

Question 28

What is specific performance W6R

Answer 28

Specific performance may be awarded where damages are inadequate, eg for unique property such as land, or where damages would only be nominal. Nominal damages from Google searching is a small sum of money awarded as damages to someone who has suffered a legal wrong but no actual financial loss.

Question 29

Beswick V Beswick W6R

Answer 29

A man made a contract which would have provided a pension for his widow when he died. The pension was never paid but due to privity she was unable to sue for her loss. She sued as executor of her husband’s estate. Although the husband had suffered no personal loss, and so damages would have been nominal, the court awarded specific performance of the obligation to pay the pension.

Question 30

When will specific performance not be awarded W6R

Answer 30

Specific performance will not be awarded in contracts for personal services or employment, S.236 of the Trade union and Labour Relations Act 1992.

Question 31

What is the exception to the previous card W6R

Answer 31

Although there is an exception where the relationship with the employer has not broken down. Irani v Southampton AHA Irani and a colleague had a dispute and the employer decided the only way to solve it was to dismiss Irani as he was the more junior employee. The employer did not have any personal problems with Irani’s work or competence. The court awarded an order to force the employer to reinstate Irani.

Question 32

Case that shows specific performance will not be awarded in contracts which requires monitoring of an ongoing obligation W6R

Answer 32

Ryan v Mutual Tontine A contract required a landlord to have a porter constantly present at some flats. The person appointed was often absent due to having another job. The tenants sued for specific performance of the landlord’s obligation but lost as the court would have had to supervise the order to make sure it was being upheld.

Question 33

Case that shows specific performance will not be awarded where it would cause hardship W6R

Answer 33

Patel v Ali Mr and Mrs Patel contracted to sell their house to Mr Ali. Completion of the sale was delayed by Mr Patel’s bankruptcy. At the time that they agreed to sell, Mrs Patel was healthy and had one child. However, during the delay, Mrs Patel contracted bone cancer and had to have a leg amputated. She also had two more children and she became heavily reliant on friends and neighbours to assist her with day to day activities. Mr Ali sought specific performance of the contract. Held: Specific performance was denied on the grounds that it would cause hardship amounting to injustice on Mrs Patel if she was required to move out.

Question 34

Case that shows specific performance will not be awarded where the contract was obtained unfairly or through taking advantage of the other party’s mistake W6R

Answer 34

Walters v Morgan The claimant pressured the defendant into signing a lease which allowed them to mine some land, the defendant did not realise the value of the land. Once the defendant discovered the true value, he refused to allow the defendant onto the land. Held: the court refused specific performance as the claimant had tried to take advantage of the defendant’s ignorance by rushing him into signing the lease.

Question 35

Where can injunctions be awarded W6R

Answer 35

Injunctions may be awarded to prevent a future breach of contract, or to force someone to do something. Injunctions will not be awarded where it would be unfair to the defendant. This was shown in the case Shell v Lostock Garage. L had a contract where they agreed to only buy petrol from Shell Shell sold petrol more cheaply to other garages than L which made it difficult for L to compete and make a living L decided to buy petrol from another supplier and Shell asked for an injunction to prevent this as it would be a breach of contract They lost as they were not treating l fairly in the first place.

Question 36

When will injunction not be awarded W6R

Answer 36

injunctions will not be awarded if the effect is to give SP where it would not normally be granted, eg an employment contract. Page One Records v Britten The Troggs agreed that Page one could be their managers for 5 years in return for 20% of their profits. When their relationship broke down, Page One sought an injunction to prevent The Troggs appointing a new manager. Held: The injunction was refused. To grant an injunction would be like ordering specific performance of a contract for personal services since the effect would be to force The Troggs to continue to employ the claimant or not work at all.

Question 37

Consumer remedies - Consumer Rights Act On the rest of contract law sheet 7.10.20

Answer 37

Concerned with breach of the main implied terms in this act: S.9 goods must be satisfactory quality, S.10 must be fit for purpose and S.11 goods must be as described. S.2 short term right to reject goods under. S.22 right can be exercised up to 30 days after purchase, S.23 there is a right to have the goods repaired or replaced. S.24 there is a final right to have a price reduction or to reject the goods. S.24(8) a refund can be reduced by a deduction for use, but not if the final right to reject is within 6 months of purchase.