Chapter 11

Question 1

What is a legal remedy?

Answer 1

A legal remedy is what the law allows a harmed party to be awarded for the inappropriate behaviour of another party. It is a way in which a dispute is resolved between parties.

Question 2

What are the three types of remedies available to parties in the event of a breach of contract?

Answer 2

In the event of a breach of a contract, there are three remedies available:
• Those that enforce the contract
• Those that cancel the contract.
• Those that compensate the harmed party for the breach.

Question 3

When will the court not enforce the contract?

Answer 3

A court will not allow a party to enforce a contract when the contract is illegal, impossible or against public policy.

Question 4

What are the three enforcement remedies available to the innocent party?

Answer 4

Three enforcement remedies are:
• An order for a specific performance
• An interdict
• The innocent party withholding their own performance.

Question 5

Define an order for specific performance.

Answer 5

An order for a specific performance is an enforcement order to do what was promised originally.

Question 6

Will the court always grant an order of specific performance?

Answer 6

The court has a choice whether to grant or refuse a specific performance order. The court will usually grant an order for specific performance if the contracting parties are able to perform in terms of the contract but choose not to do so.

Question 7

When will the court refuse the order for specific performance?

Answer 7

The court was refuse this order if:
– The performance has become impossible.
– The performance will cause too much suffering.
– The cost for the defendant will be too high.
– If the debtor is insolvent.

Question 8

What happens when the court refuses to grant an order for specific performance?

Answer 8

If the court refuses to order specific performance then the hand party can claim damages instead.

Question 9

Define an interdict.

Answer 9

An interdict is a court order that orders someone to not do something. The innocent party can apply to court for an interdict (when the other party breaches part of a contract) to prevent them or stop the breach.

Question 10

Differentiate between a prohibitory interdict and a mandatory interdict.

Answer 10

A prohibitory interdict is a court order to stop something, while a mandatory interdict order some kind of action to occur.

Question 11

How does withholding the innocent partiy’s performance help as a remedy?

Answer 11

If one party fails to deliver full and proper performance timely, the innocent party can refuse to give their own performance to put pressure on the other party to perform properly. This can only happen if the guilty party was supposed to perform first and the two performances are given in exchange for each other.

Question 12

True or false: the breach of contract itself does not bring the contract to an end?

Answer 12

True.

Question 13

Is it possible to cancel a contract if it does not have a cancellation clause?

Answer 13

Yes, it is possible for a party to succeed in cancelling a contract even without a cancellation clause only when the breach of contract is material, relates to an important part of the contract.

Question 14

Discuss cancellation because of lateness.

Answer 14

Lateness of performance may or may not allow a party to cancel the contract. They can only cancel the contact if it is critical to perform on time, i.e. performance is useless after the time has passed.

The innocent party can also have the right to cancel the contact by giving the other party reasonable notice which states that they must meet their duties in terms of the contract by a given date and if they don’t then the other party will have the right to cancel the contract.

This is a remedy for default by debtor and default by creditor.

Question 15

When is it possible to cancel a contract because of malperformance?

Answer 15

Cancellation is only possible (1) in terms of the cancellation clause and (2) if the breach is material and major.

Question 16

When is it possible to cancel a contract because of repudiation?

Answer 16

In the case of repudiation, the innocent party decides whether or not to cancel the contract. However, the breach should be material and major.

Question 17

When is it possible to cancel a contract because of impossibility (debtor)?

Answer 17

The creditor may cancel the contract and claim damages.

Question 18

When is it possible to cancel a contract because of impossibility (creditor)?

Answer 18

The debtor may choose to cancel the contract or seek specific performance

Question 19

What happens when a contract is cancelled? What are the exceptions?

Answer 19

When a contract is cancelled, everything has to be returned to what it was before the parties entered into the contract. There are a few exceptions at this, leases unemployment contracts.
If the innocent party chooses to cancel the contract, they have to indicate this decision clearly to the party that is in breach.

Question 20

What does damages refer to?

Answer 20

Damages refers to the money that a defaulting party has to pay to the other contracting party to compensate for the loss they suffered as a result of the breach of contract

Question 21

Is it possible for the innocent party to claim damages even when the contract is not cancelled?

Answer 21

Yes, the issue is whether they have suffered a loss due to the other conducting parties breach of contract or not.

Question 22

What damages can be claimed for a breach of contract?

Answer 22

The harmed contracting party can only claim damages for loss that resulted naturally from the beach, as well as losses that parties considered to result from such a breach.

Compare the financial position of the harmed party after the breach to what it would have been if the contract has been properly completed to calculate the amount of damages payable.

Question 23

What is the harmed party’s responsibility in terms of claiming damage?

Answer 23

The harmed party should do whatever they can to keep their losses to a minimum, and thus the damages.

Question 24

Define a penalty clause. Can a harmed party claim both, damages and penalty?

Answer 24

A penalty clause is a part of a contract that specifies what (damages) will be payable if either party breach is a contract.
An innocent part cannot claim both, damages and penalty, in terms of the penalty clause.

Question 25

How to choose a remedy?

Answer 25

When one party has lost money or suffered a loss because the other party has breached the contract, the harmed party can claim for damages and, at the same time, either seek to enforce the contract or to cancel it.