Week 8 Judicial remedies Flashcards
(20 cards)
Self help remedy “lien”
Lien is the retention of a physical thing.
In practical terms, it means a refusal by the innocent party (who is in possession of the thing) to give up possession to the contract-breaker (and where contract-breaker otherwise has a right to the thing)
repairies lien hold phone till money pays
First judicial remedy Declarator
Declarator is an order of the Court ‘declaring’ what the law is.
Eg Parties might dispute what is the proper interpretation of a contract (which is a legal) question, and one or other party could ask the court for declarator.
Second judicial remedy Interdict
–> Interdict is a preventative remedy, often sought in urgent circumstances.
Interim interdict
In cases of urgency, it is often sought on the ‘say so’ of one party,
or ex parte’, and the Court will grant an interdict ad interim (‘for the time being’) if,
(i) there is prime facie evidence that the person to be interdicted has or threatens to commit a legal wrong; and (ii) The balance of convenience favours grant. It is for this reason that the vast majority of interdicts are ‘interim, or ‘holding’ remedies to protect the status quo
Specific implement
To compel performance instead of a contract break,you would petition for a specific implement
Specific implement is a positive order:
The court is being asked to require the person subject to it to do something
ad factum praestandum
( not for payments)
Retail Parks Investments Ltd v Royal Bank of Scotland Plc (no.2) 1996 SC 227; and
not available for marriage
One Records Ltd V Britton [1967] 3 All ER 822
Actions for payments
: What happens if the counterparty refuses or fails to pay money due under a contract?
The innocent party, or the ‘creditor in that payment obligation’, can seek a decree for payment.
It is also possible to claim payment of interest due under the contract and interest at the judicial rate (from the date of the action)
damages
Presumed that every breach of contract can give rise to a damages claim.
Webster v Cramond Iron Co (1875) 4 R
Not always the case
Wilkie v Brown [2003]. No right to damages if no actual loss.
Awards of damages are related to loss suffered.
The fundamental objective for damages
An award of damages is intended to place the innocent party in the position they would have been in, but for the breach by the contract breaker.
Damages are essentially compensatory
Fundamental objective
Damages are awarded to provide a money compensation to the innocent party
for,the losses incurred they incurred
Example of A
S sells widgets at contract price of £100 to B. Seller delivers none. Price to acquire on open market now £150. B’s loss could be:
The extra £50 to acquire from the open market (the difference between the contract price if performed and actual performance).
If, instead, B proposed to resell the widgets to C for £125:
ii) B’s claim is £25 for lost profit on that resale.
Assessing damages
-compensate for the actual lose suffered from the innocent party,with a view to putting the innocent party in the same position
Loss can be the difference in the value of the contractual and actual performance
OR
Loss can be the cost of curing the breach of contract.
Example where the innocent party has a choice
E contracts with HB for a new house under a building contract. The works are defective and/or not in accordance with the contract specification.
Two ways to put E into position they would have been in had HB performed the contract:
a) damages could be the cost of repairing the defective house or to make it conform with the contract specification; or
b) E could claim the difference in value between the house as it should have been built (without defectives) and the value of it in its defective state.
taking account of events post dating the breach of contract
Damages are awarded to compensate for loss.
- Court can take into account events subsequent to the conclusion of the contract.
See: Bunge SA v Nidera BV [2015] UKSC 43.
In Bunge Seller (S) agreed to sell Russian wheat to buyer (B). After they agreed their contract, but before any delivery, Russia imposed an export ban. S purported to cancel the contract, which B accepted as repudiation by S. B claimed damages (under a default clause). Tribunal held that B sustained no loss, as the Russian ban had persisted through the period of the Contract.
Upheld by the Supreme Court, which affirmed the compensatory principle (to which even the default clause was subject).
Breach does not need to be solely causative of the lostt
In A/B Karlshamns Oliefabriker v Monarch Steamship Co Ltd 1949 SC (HL) 2.
Facts: A ship was hired to take cargo from Manchuria to Sweden. The outbreak of WWII was imminent, and known to both parties. The departure of the ship was delayed due to it being unseaworthy, which was a breach of contract by the ship-provider.
The ship set sale late; war broke out. The British Government requisitioned the ship and ordered it to go to Glasgow. The cargo was off-loaded and shipped at significant additional expense to Sweden.
Held: The hirer was allowed to claim those extra costs from the ship provider: the unseaworthiness had been the cause of the loss, and which lead to each subsequent link in the chain of causation.
Damages fundamental principle
some of the foregoing examples raise the issue of remoteness of loss
-certain types of losses more remote than other from the usual kinds of losses flowing from the breach of question
Case for remotness and facts
Balfour beatty construction(Scotland) Ltd v Scottish power Plc 1994 SC
BB construvting a concrete viaduct,they contracted with SP to provide a temp generator
generator failed concrete wasnt done in one single continuous poor
BB claimed costs of that work SP said it was to remote
Outcome for Balfour beatty construction v Scottish power
Outer house held that the need for a continuous poor was beyond waht SP could have reasonable contempleted
The IH: held that, for the loss to be recoverable, SP did not need to foresee the precise consequence of the loss, so long as SP could reasonabley foresee the type of loss (and which was recoverable, even if more extensive than might be anticipated);
IH assumed that SP would have known of the quick-hardening properties of concrete. Reclaiming motion allowed.
i.e balfour won
Appeal for Balfour beatty construction ltd v scottish power
SP appealed to the House of Lords
Held:
1) IH had been wrong to impute technical knowledge to SP of the qualities of concrete, but which BB had not disclosed to SP at the time;
2) What was within the reasonable contemplation of the parties was a Q of fact (so should have respected the LO’s findings in fact that this had not been within the reasonable contemplation of SP); and
3) Appeal allowed.
Two stage test for remoteness
Two limbs from Alderson B. in Hadley v Baxendale, defining what is recoverable for breach of contract:
Loss which arises in the usual course of things; or
It was in the reasonable contemplation of the parties as the probable result of the breach.
Limb (2) is sometime referred to as ‘special circumstances’ made known at the time of the contract.
NOTE: after 180 years…….
still being refined
Contract terms-Remedies provided by the contract
Parties free agree clauses in their contract, which exclude, limit or pre-estimate their loss in the event of breach.
Provides certainty.
Exemption clause: party seeks to limit their liability for damages.
Liquidated damages clause: Clause to pre-determine amount of damages payable in specified circumstances
New test from CAvandish square holdings v Talal el makdessi for penalty clauses
Does the innocent party have a legitimate interest that the clause is aiming to protect?
Is the specified sum exorbitant?
Court has to balance the interest of the innocent party in compelling performance v allowing exorbitant penalty sums.
If the award is a huge sum out of proportion with what might be awarded as damaged then it is likely an unenforceable penalty clause.
If not exorbitant then the courts are now likely to allow this and deem it a liquidated damages clause.
