Chapter 11 - Contractual Remedies Flashcards
Introduction : Contractual remedies
Remedy of specific performance is the primary remedy for breach of contract.
It is aimed at accomplishing the positive performance of the contract.
Cancellation is then seen as a “supplementary remedy” since it is aimed at ending the contract.
Specific performance and cancellation are mutually exclusive., but they can be claimed as alternative to each other.
Claiming damages is an additional remedy for innocent party.
Specific performance
The remedy of specific performance aims at achieving the same results that the parties intended to achieve when they entered into the contract.
Alternative Orders to force a party to execute their side of the contract.
Order for specific performance
- Every party to the contract has the right to demand performance in terms of the contract.
- Exceptions - when debtors estate has been sequestrated it when object to material has been destroyed through no fault of either party.
Order for reduced performance
- The principle of reciprocity is applicable in this instance which simply means that one party undertakes certain obligations in return for the other party’s undertaking to perform certain obligations in terms of the agreement.
Prohibitory interdicts
An interdict is a court order that prohibits the respondent from doing a specified thing.
May be used as a form of specified performance, to protect ancillary rights, to prevent a threatened breach of contract and to prevent third party intervention.
For example an applicant may apply for interdict if debtor breaches a restraint of trade agreement.
*** The requirements are:
- a clear right
- injury
- no offer effective remedy
Cancellation
Cannot be claimed in all instances.
It is an extraordinary or supplementary remedy and only available of the breach is substantially serious or material.
However if parties have recorded a cancellation clause in their contract, the cancelation clause will have superiority over the Common Law rules in respect of material breach.
Breach = minor then NO cancellation clause, the innocent party seek a remedy in terms of specific performance and claiming damages.
Cancellation
A contracting party that has the right to cancel cannot be forced to do so.
If cancellation is selected as the preferred option then the innocent party will have to be content with damages.
** The right to cancel must be exercised within a reasonable time.
Innocent party exercises right of cancellation through notification of cancellation in any form.
A threat to cancel is not counted as a cancellation
The consequence of cancellation
Major consequences is the termination of obligations.
If neither party has performed both of them are relieved of their obligation to perform.
If one or both parties have performed, restitution must take place by the owing party.
Where restitution has become partially impossible, the rest must be returned by owing party.
If it is impossible for owing party to return innocent parties performance, the innocent party need also not return guilty parties performance.
Where the contract involving continuing obligations is cancelled, the rights that have accrued prior to cancellation are not affected.
Damages
Patrimonial loss
- Claiming for damages
Principles that regulate Claiming for damages
- Causal connection between BOC and Loss
- Foreseeable Loss
- The duty to mitigate damages
- The proof of loss and calculation of damages
Principles that regulate the Claiming of damages
- Casual connection
- Foreseeable Loss
- The duty to mitigate damages
- The proof of loss and calculation of damages
Patrimonial loss - Claiming for damages
**Claiming for Damages are primary remedy for breach of contract for loss suffered.
**The purpose of the remedy to claim for damages is in order to place an innocent party in a position they would’ve been if contract was properly performed **
Principles that regulate the Claiming of damages
**Casual connection
- BOC must be cause of patrimonial Loss
- guilty party is liable for all loss even BOC was one factor
- *Foreseeable Loss
- BOC may lead to a series of events that culminate in disasters that seem far removed from BOC.
- decide which events may be fairly blamed
Types of loss that defendant is liable for
- loss that naturally flows from BOC
- loss that is actually foreseen
- loss that reasonably should have been in their contemplation and probably consequence of BOC.
The Duty to Mitigate Damages
The innocent party is not entitled to blame the guilty party for losses which the innocent party could have avoided.
Proof of loss
The most critical aspects of legal action between innocent and guiltily party.
In a civil case the onus of providing the loss which he suffered rests on the party who claims damages.
They party who claims damages must provide proof of loss.
Calculation of Damages
Examples
- item does not arrive in time the difference between contract price and market price
- if a debt is paid late then interest is added from due date of debt owing.
If work is below standard then the value of the work is the difference between lower value and higher contract price of hiring someone else to rectify defective work.
Exceptio non contractus
One can withhold performance until the other party performs.
