Remedies Flashcards
If the court decides that the term is a condition, and the contract has not been fully performed, the innocent party will usually have the option of…
…terminating the future performance of the contract, as well as obtaining damages for any additional loss suffered. This is so, even if he has only suffered minor loss or damage.
If the court decides the term is a warranty, the innocent party..
…cannot terminate the contract but can only sue for damages for loss suffered.
The use of the word ‘condition’ raises a presumption that it is used in the legal sense, but this may be rebutted from evidence of the contract as a whole. Schuler v Wickman Machine Tool Sales Ltd [1974]
If the term is classed as innominate or intermediate,
it is necessary to wait until…
…the breach of contract has occurred to decide whether the innocent party should be allowed to terminate the future performance of the contract.
If the breach deprives him of substantially the whole benefit of the contract he can terminate, but not otherwise. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962]
What remedies are available under common law (and therefore available as of right provided any relevant conditions are fulfilled?)
Damages, termination and action for an agreed sum.
If the contract provides that one party shall pay a definite sum of money to the other, then if the duty to pay has arisen but the payer refuses to pay, the payee can bring a claim for…
…the agreed sum.
This is not a damages claim so the remoteness and mitigation rules do not apply. It is a very straightforward claim for the amount due, ie a debt action.
To bring a claim for an agreed sum, the duty to ? must have arisen.
…pay.
If a breach does entitle a party to terminate, the breach is often said to be…
…repudiatory.
If the innocent party has the right to terminate the future performance of the contract, he does not have to do so. He has a choice. He can either…
…terminate the contract or affirm it, although in reality there may be no choice if the other party is refusing to perform his obligations.
If the innocent party affirms the contract then the contract is not over and both parties should continue to perform their obligations. He can still claim ? for any loss he has suffered.
…damages.
Usually, if a contract has been fully performed, it will not be possible to terminate. However, special rules apply to sale of goods contracts. If the seller breaches ss 9-11 of the Consumer Rights Act 2015 or s 13 or 14 of the Sale of Goods Act 1979, the buyer may usually..
..reject goods.
Even if the contract has been fully performed, ie the buyer has received the goods and paid for them, he may give them back and get his money back.
The buyer may lose the right to reject - eg under the Sale of Goods Act 1979 - if he has ‘accepted’ the goods (within the meaning of s 35 of the Act).
The breach which gives the innocent party the right to terminate the contract (advance warning) may be what type of breach?
Anticipatory
If one party does indicate that he is not going to perform the contract before the date due for performance to begin, then the other party can:
▪ terminate the contract and sue for damages immediately; or
▪ treat the contract as continuing and wait until the time fixed for performance in the hope that the party in breach will change his mind and perform the contract.
Equitable remedies are discretionary. These are;
Specific performance
Injunctions
Equitable remedies are only available if…
…damages are inadequate. For example, specific performance (SP) of a contract for the sale of something unique such as a house.
Name 4 restrictions on specific performance?
- Not granted where an award of damages is an adequate remedy.
- Not granted where the court would have to supervise the parties over a period of time
- Specific performance will not usually be granted for contracts involving services or work.
- Specific performance will be granted only if it is just and equitable to do so.
An injunction may be prohibitory (which forbids a person doing a particular act) or..
…mandatory.
A mandatory injunction requires a person to put right a breach of contract. A mandatory injunction is rare in practice.
If the injunction will last for only a relatively short time (eg a few weeks), is it more or less likely to be granted?
More likely.
If granting the injunction will have the effect of seriously affecting the party’s career it is *** to be granted.
Unlikely
An injunction will not be granted if the court feels that the inevitable result would be to compel the party to work for the original employer. However, injunctions have been awarded to enforce
..negative covenants in employment contracts.
The general idea behind a restitution remedy is to prevent one party..
…being unjustly enriched.
If one party (the payer) has paid money to the other (the payee) under a contract, the payer can bring an action in restitution to recover the money if the payee is in breach and there has been a total….
…failure of consideration
If the other party has done anything at all in performance of the contract the advance payment will *** recoverable in restitution (although it may be recoverable to an extent as part of a damages claim).
…not be recoverable.
When would a ‘quantum meruit’, ie a reasonable sum for work done be awarded?
When one party has supplied goods or done work for the other and the other party is in breach of contract, the party supplying the goods/doing the work may be able to bring a claim in restitution for a reasonable sum for work done or goods supplied as an alternative to a claim for damages.
It may also be awarded if goods have been supplied or work has been done but a contract has not been formed, the supplier may be able to bring a claim in restitution for a reasonable sum for work done or goods supplied. (British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984])
The doctrine of complete performance provides that performance of contractual obligations must be…
…precise and exact. Cutter v Powell (1795)
