Award for a sum due under a contract

Question 1

Explain award for a sum due under a contract?

Answer 1

• Looks like specific performance because you are having the defendant deliver an obligation, but that obligation is just money.
• Award for a sum due differs from CL damages, since it is a remedy provided as a right and does not require proof of any loss.
• Onus of Proof: If the claimant establishes that D has failed to pay a sum due, the court will order the sum to be paid S. Smith
• 1)Contract for Sale of Goods
• 2) Anticipatory Breach
• 3) Agreed Damages Clauses

Question 2

Contract of Sale of Goods?

Answer 2

HOW: In order to maintain an action for an agreed sum, the sum must be due  claimant must himself have performed his duties under the contract
* Seller can sue for sum due: Sale of Goods Act: s. 52(1)
o “If, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against the buyer for the price of the goods.”
* Award for sum due does not prevent suits towards special damages or interest: Sale of Goods Act: s.57
o “This Act does not affect the right of the buyer or the seller to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover money paid if the consideration for the payment of it has failed.”

Question 3

Anticipatory Breach - White v Carter

Answer 3

WHAT: when there is an act of anticipatory breach, the innocent party has an option – 1) they can accept the breach and bring the contract to an end subject to the obligation to mitigate. 2) The plaintiff has the alternative not to accept the breach and continue with the performance of the contract. White & Carter
EXCEPTIONS to #2: there are two grounds on which we can depart from the general principle White & Carter
(1) Cooperation Qualification: this is the rare case where the victim wanting to continue performing cannot perform without any cooperation from the breacher
A claimant is only entitled to a particular sum due when the performance has been completed. If the defendant restricts the claimant from performing their obligations, the claim will be restricted to a claim for damages.
(2) Victim/Plaintiff has no legitimate interest in performing the contract  may be possible to force them into the law of damages
Legitimate interest (real financial interest) from the plaintiff must be shown to make an election not to accept an anticipatory breach  threshold = de minims = honest rationale for carrying out the contract
Exception: Part performance is not permitted for victim/plaintiff unless the plaintiff has substantially completed their obligations, they can receive sum due

Question 4

Agreed damages clauses – Liquidated Damages Clauses:

Answer 4

WHAT: sometimes the parties to a contract have themselves provided for what is to happen in the event of a breach by one or both of them
RULE: General principle is that an agreed damages clause will be classified as liquidated damages & thus enforceable, only if it is a genuine pre-estimate of the expected loss .
* Must be a genuine pre-estimate of the loss, can’t be an arbitrary number
* Factors militating in favour of non-enforceability:
o Sum payable is far in excess of estimated amount for breach
o Sum is payable for any number of breaches of varying importance
 because unlikely that same damage would be caused by varying breaches
o Sum is expressed to be payable on a certain date and further sum in the event of default
 Where a sum is expressed to be payable on a specific date & a further sum in the event of a default being made  latter sum prima facie penalty b/c a short delay in payment is unlikely to cause significant damage