9. Equitable and other remedies

Question 1

DEF: Contract of Guarantee

Answer 1

The guarantor agrees to discharge debt incurred under the contract if the debtor defaults (secondary obligation under the contract)

Question 2

Does a contract of guarantee need to be in writing?

Answer 2

Yes. needs to be evidenced in writing - otherwise will be void
- Need not be a written contract but must be written evidence of transaction
- evidence must have existed before creditor wants to enforce contract
- must be signed by the guarantor

Question 3

DEF: Indemnity

Answer 3

A primary obligation, one party promises to reimburse another in respect of a particular loss arising under the contract
- DOES NOT NEED TO BE IN WRITING
- Can be made between one party of the contract and a third party

Question 4

What types of remedies would make the defendant perform the contract?

Answer 4

1. Action for an agreed sum
2. Specific Performance
3. Injunction

Question 5

Action for an agreed Sum: definition and requirements

Answer 5

Suing for a fixed amount of money that is owed (normally price of goods or services supplied under contract)
- money has to be owed and date for payment must have fallen due
- no need to prove loss is not too remote etc.

Question 6

Specific Performance: definition and requirements

Answer 6

Equitable remedy: claimant asking court to make the defendant do what they agreed to do
- Generally only available when damages are inadequate
- generally not used for employment contracts
- not available as of right, claimant must have acted equitably and SP must not cause disproportionate hardship to defendant

Question 7

Injunction: definition and requirements

Answer 7

Only available at discretion of court + where damages are inadequate
- Commonly used to restrain the defendant from doing what they have agreed NOT TO
- will not be granted if the effect would be compelling D to do acts which cannot be ordered by specific performance (eg. employment contracts)

Question 8

Aim of a restitutionary Remedy

Answer 8

To prevent one party being unjustly enriched at the expense of the other party

Question 9

Two types of restitution / two scenarios where restitution arises

Answer 9

1. Money has been paid under contract and there has been a total failure of consideration
2. One party has done work for another / supplied goods and want compensation for this

Question 10

Restitution (total failure of consideration): requirements

Answer 10

Payer can bring action for the money if:
1. payee is in breach
2. total failure of consideration

Question 11

Restitution (quantum meruit): when is this claim relevant?

Answer 11

1. Contract has been broken
2. Contract was never formed

Question 12

Restitution (QM) claim where a contract has been broken, what can the claimant sue for and does this preclude other remedies from being sought?

Answer 12

1. Claimant can sue for a reasonable sum for work done / goods supplied
2. Alternative to a claim in damages (cannot claim both)

Question 13

Restitution (QM) claim when a contract was never formed: what can the claimant sue for?

Answer 13

A reasonable sum for work they have done

Question 14

Restitutionary Damages: what are they and when are they relevant?

Answer 14

1. An award of damages not simply based on loss suffered by the claimants
2. If claimant has suffered no discernible financial loss other than loss of opportunity to do something (ie. negotiate a release fee: negotiating damages) and it is unfair to allow D to retain full advantage from their breach

Question 15

Can a claimant sue for both restitution and damages?

Answer 15

Yes, if the case fits in either (1) total failure of consideration or (2) quantum m, restitution can be claimed
- this does not preclude the claimant from also claiming damages, for example, for expectation loss (if they had to purchase the goods elsewhere for more)

Question 16

What are negotiating damages, when can they be awarded?

Answer 16

1. Damages where the claimant has lost the opportunity to negotiate a release fee (ie. from a restrictive covenant)
2. Can only be awarded if there if NO financial loss other than chance to negotiate a release fee (ie. if the claimant also suffers financial loss by losing business, negotiating damages cannot be claimed - they will have to claim for the loss of business)

Question 17

Can the court award negotiating damages if they do not know what the release fee would have been / is?

Answer 17

Yes, the court will award a reasonable sum based on hypothetical negotiations