Breach of Contract

Question 1

Taking a breach of contract case to court

Answer 1

1. Prove that a contract exists
   [offer, acceptance, consideration, intention to create legal relations, capacity, legal purpose]
2. Prove that the contract has been breached
   [one of the terms (promises) has not been fulfilled]
3. Request a remedy
   [damages, injunction, specific performance]

Question 2

What are Remedies

Answer 2

Where one party to a contract can establish that the other is in breach of contract he/she will be entitled to claim certain remedies, the most common of which is damages.

Question 3

What are damages

Answer 3

monetary compensation which is awarded in order to place the ‘injured’ party in the same position as he/she would have been had the contract been properly performed.

Question 4

What are nominal damages

Answer 4

• If the claimant has suffered no loss as a result of the breach of contract then he/she will be awarded nominal damages (determined at the discretion of the court but they may be as low as £10)
• The defendant will usually be required to pay the legal costs.

Question 5

What type of remedy is damages

Answer 5

a common law remedy

Question 6

What is a common law remedy

Answer 6

that any party who can prove breach of contract is entitled to an award of damages.

§ The amount awarded however is determined by the court.

Question 7

When can damages be recovered?

Answer 7

§ They are for a loss which arises naturally from the breach of contract, in the
usual course of things OR

§ They are for a loss which is reasonably within the contemplation of the parties when they make the contract.
- Damages which are not anticipated by the parties cannot be recovered.

Losses that do not satisfy these rules are said to be too remote and cannot be recovered.

Question 8

Mitigation of loss due to breach of contract

Answer 8

○ Any party who suffers a loss as a result of a breach of contract must take all reasonable steps to mitigate (reduce) his/her loss. Any party who fails to do so will only be entitled to nominal damages.

E.g. Brace v Calder 1895

Question 9

Equitable remedies

Answer 9

It should be noted that while the injured party is entitled to damages if he/she proves breach of contract, both injunctions and specific performance are equitable remedies and as such they are discretionary

awarded by court if felt appropriate

Question 10

Injunction

Answer 10

An injunction is a court order imposed on the other party in order to stop him from acting in breach of contract.

a court will not award an injunction if it feels that an award of damages would be a satisfactory remedy instead.

Question 11

When is an inunction granted?

Answer 11

An injunction would be granted as ‘damages’ was an inadequate remedy because:

i. They would be difficult to assess AND

ii. Financial reward was not the only benefit from winning the Derby
E.g. Araci v Fallon 2011

Question 12

Specific Performance

Answer 12

This is another equitable remedy which could be granted at the discretion of the court.

a court order requiring the party who is in breach of contract to perform the contract as agreed.

• useful in contracts for the sale of land or houses because each piece of land/house is unique

Question 13

What happened if you refuse to comply with a court order?

Answer 13

would be considered to be in contempt of court and could face a fine or even imprisonment.

Question 14

When is specific performance not awarded

Answer 14

1. The CLM has behaved badly
2. Where personal services are involved
3. It would cause excessive hardship to the DEF