Contract

Question 1

Are advertisements of reward an offer? Are other adverts?

Answer 1

Acceptance by completing act. Adverts intention to reat unless ahow intention to be bound.

Question 2

When are auctions a contract

Answer 2

No reserve price:

Barry v Davies - ‘sold without reserve’, Mr Barry made the highest bid for
the machines but the auctioneer did not accept it as he knew he could get a much higher
price for them elsewhere. Mr Barry successfully sued the auctioneer for breach of unilateral contract. Only one party had made a promise, namely the auctioneer. He had promised to sell the machines to whoever might make the highest bid. Why would it have been pointless Mr Barry suing the owner of the machines? The auctioneer had not accepted his bid and so there was no
contract of sale with the owner. Mr Barry’s damages was the difference between the amount of his bid (£400) and the total value of the machines (£28,000) ie £27,600.

Reserve price:

When gavel comes down.

Question 3

Are tenders offers?

Answer 3

No usually invitations to treat, but may be different if promised to accept lowet tender OR impliedly promise to consider all confriming tenders - would be a unilateral contract (1 party making promise):
1. Blackpool & Fylde - inivation to tender said “tender has to be received no later than 12:00 noon”. Put in at 10:00am before deadline, letter box not emptied on time. Tender recorded as late. Successfully sued for implied unilateral promise to consider all tenders received on time.

Liable for loss of opportunity.

Question 4

What are the conditions of acceptance?

Answer 4

1. An expression of an assent (must be communicated by offerer or agent). SIlence not enough unless conduct;
2. which is unequivocal (unconditional).

Question 5

Battle of the forms?

Answer 5

• Last shot fired
• If no acknowledgement slip like in Butler Machien case, delivery may be conduct that last set of Ts & Cs won.

Question 6

What is postal rule?

Answer 6

Applies only to acceptance.

a letter of acceptance will be effective when posted even if the letter is lost in the post, conditions must be satisfied:

1 Reasonable in all circumstances to use post (no urgency?);
2. Properly addressed, stamped & posted; and
3. Postal rule not excluded.

Exclusion could be “we need to RECEIVE your acceptance”. Or ‘notice in writing to [the defendant]’ - excluded.

Question 7

When can’t you withdraw offer before time limit set out in offer?

When can you no longer recvoke offer of unilateral contract?

Answer 7

If given consideration to have specific period of time - even if it is just £1 to keep offer open.

partial performance of a unilateral contract is sufficient to prevent revocation by the offeror - two offers (1) express offer and (2) not to revoke if act started within reasonable time.

Question 8

When is revocation effective?

Answer 8

The Brimnes [1975] communicated when received (e.g email) if received during normal business hours. May be later if often work later (such as lawyer).

Offer to public at large (like Carbolic Smoke Ball) - best the offeror can do in the circumstances is publish a notice of revocation in the same place as the offer and with the same prominence.

Revocation can happen when lapse of reasonable time. Different fo everything - pperishable goods will be quicker.

Question 9

Differences between acceptance and revocation of offer?

Answer 9

1. Acceptance must be communicated by the oferee or an authorised agent (whereas revocation just needs to be an objectively reliable third party.
2. Postal rule does not apply to revocation, needs to be when received (if in office hours).

Question 10

Certainy and completeness key things to consider?

Answer 10

1. Scammell v Ouston - You go to a car dealership and say you are interested in buying a particular car priced at £10,500. You agree to buy it on ‘hire purchase terms’. In the absence of any other details of the hire purchase agreement (eg duration, number and amount of repayments) it would be too vague to be a contract.
2. An agreement to buy ‘timber of fair specification’. This may seem vague but the court
   held there was a binding contract on the particular facts of a case. The parties had dealt with each other in the past; they were well acquainted with the timber trade; and the contract had been partly performed. In other words, as far as the parties
   themselves were concerned there was no uncertainty.
3. An agreement between a petrol company and filling station to supply petrol at the market price prevailing at the date of delivery. Although the exact price has not been agreed, if the agreement provides a mechanism by which the uncertainty can be resolved there would be a binding contract.
4. Need not be a signed contract.

Factors:

(a) whether the parties are in the same trade;
(b) trade usage;
(c) whether the arrangement has been acted on for any length of time; and
(d) whether there is an objective mechanism for resolving any uncertainty such as an arbitration clause.

Question 11

Rebuttable presumptions for intentions to be legally binding?

Answer 11

1. Commercial - presumption of intention to be bound (rebuttable). Even if trivial, consider the Esso coin case where they offere free coin for every 4 gallons of petrol. Binding.;
2. Domestic agreement (intention not to be bound) - parties are family, friends etc.
3. If contract says “binding in honour only” resumption rebutted
4. If domestic is rebuttable:
   * Are parties at arms lenght (e.g divorce)
   * Lot of money at stake e.g joint venture
   * Express agreement
   * Relationship not very close? e.g counsins, lots of money at stake?

Question 12

Types of consideration?

Answer 12

1. Executory consideration = a promise
2. Executed consideration = an act

Bilateral contracts by nature are executory consideration as they are an exchange of promises. Unilateral is one promise one act so is executed consideration.

Question 13

What are the two factors to consider for consideration?

Answer 13

Consideration need not be adequate
The two promises (or act and promise) need not be of the same value. £1 will do. It just needs some value (usually economic but not strict). Parties free to strike their own bargain.

Consideration must be sufficient
Must have proper subject matter - goods, services, moeny are fine. “Natural love & affection” or “promise to stop nagging about being disinherited” is not.
- promise to not smoke/gamble/drink was sufficient in an american court (public policy)
- Doing a public duty NOT sufficient (e.g someoen pays you to do jury service then doesn’tpay - no contract)
- Exceeding public duty is!

Past consideration is not good consideration
Exceptions:
1. Act done at promisors request;
2. Mutual understanding would be compensated; and
3. If promised before would be legally binding (this hinges on intention to create legal relationship).

Re Casey’s patents - manager asked to promote invention for owner of patent rights, after owner promised share, did not give him rights, Court found there was an implied promise to pay as manager always thought hed be rewarded in some way. Later promise just crystallised!

Question 14

What do you need to have a binding contract variation?

Answer 14

1.agreement
2.consideration
3.intention

Oftens tumbling block is consideration - often only 1 party has suffered a detriment.

Question 15

What is valid consideration for a variation?

Answer 15

General rule: simply performing existing duty in exchange for more money not consideration.

1. Exceeding contractual obligation is;
2. Conferred practical benefit (not getting LDs under main contract or expense of finding new subbie). But cannot be under financial duress.
3. Rule in Pinnel’s case - part payment not good consideration. But Common Law exception to rule is if consideration is something else (need not be adequate)! E.g if you pay early. “Horse, hawk or robe”. Make sure somethign else or at risk of creditor changing mind. Consider promissory estoppel as a defence.

Question 16

Rule in Pinnel’s case - can someone be estopped from gpoing back on their promise to accept part payment?

Answer 16

Promissory estoppel can estop someone from going back on their promise to accept part payment (even if no consideration) if:
1. You have made promise not to enforce your legal rights;
2. Someone has relied on that promise (even if no consideration); and
3. You will be estopped from renegging on promise if it would be inequitable in all circumstances to do so.

High trees case: agreement by landlord to accept low level rent due to war
* Period 1: unclaimed rent from the beginning of the war until the flats were fully let.
* Period 2: unclaimed rent for last two quarters of 1945 after the war had ended.
* Period 3: claiming reinstatement of full rent for the future.

War period not recoverable, but as war ended early 1945 could recover for after and for future.

What are the limitations to the doctrine of promissory estoppel?

1. Shield not a sword (only defence, not a cause of action);
2. Promise to waive strict legal rights;
3. Promisee must have acted on promise (need not be to their detriment i.e just paying part payment is fine);
4. Can reactivate legal right upon reasonable notice. E.g reinstate right to full rent.
5. Must come to equity with clean hands E.g cannot take advantage of a creditor’s financial difficulties.

Question 17

What is privity of contract? Exceptions?

Answer 17

only the actual parties to a contract are bound by it and therefore have rights and obligations under it.

Exception: Contracts (Rights of Third Parties) Act 1999.Under the act, a party can acquire rights if:
1. The contract expressly provides they may acquire a benefit; or
2. The term purports to confer a benefit - but to enforce a contract you must be identified by name or class or answering a particualr description.

Good example is a gift receipt.

Question 18

Types of authority in agency?

Answer 18

1. Express actual authority
2. Implied actual authority (e.g express actual authority to sell certain products, implied actual authority to do other things usually carried out be sellers of goods e.d advertise)
3. Apparent (ostensible) authority (appearence of authority has come form te principle not agent). Conditions:
   (a) Principal must have represented (by words or conduct) that the agent has authority;
   (b) Third party must have relied on this representation believing the agent has authority; and
   (c) Third party must alter their position by entering into a contract.
   I these are met then bound.

Example of representation of principal - e.g say to third party “to buy my car, deal with my agent”. But agent has express actual authority to sell car for miniumum of £1,000.Agent sells for £900 - no actual authority for this, but principal will be bound if eh goes through the sale. Agent would be liable for breach under the agency contract

Question 19

Does the agent have any rights under the resulting contract with the principal and third party?

Answer 19

No. Only have authority to enter into congtract and then drops out of the picture.

Question 20

Which type of parties capacity to enter into a contract is limited by law?

Answer 20

1. Persons under the age of 18;
2. People who lack the mental capacity e.g mental health or drunkness;
3. Corporations.

Question 21

What is the rule for capacity and minors?

Answer 21

Generally the minors are not bound but the other party is. The exception to this is contracts for necessaries. Supply of necessary goods and services as well as contract of services for minors benefit.

1. Contracts for necessarry goods and services: Not just food and essentials - will depend on extend of social status and their actual requirements at date of purchase.

A bespoke tailor shop supplies an expensive blazer to a 16-year-old boy, Michael, who
comes from a wealthy family. The contract might be binding on Michael. It will depend on
whether, or not, he already has an adequate supply of blazers and the like.

2. Contracts of service for the minor’s benefit: refers to contracts of employment under which a minor gains training and experience (eg an apprenticeship) as long as, on balance, the contract is more favourable than not to the minor.

*Wayne Rooney case - When Wayne
Rooney, aged 15 years, was playing for Everton FC, he entered into a two-year contract with Proform to act as his agent. Before the end of the two years he terminated the contract. The court held he was entitled to do so as the contract with Proform (unlike the contract with Everton FC) was not a contract for necessaries *

Question 22

When does a person lack mental capacity to enter a contract?

Answer 22

Drunk or suffering from mental impairment when contract is made.

Contracts will be valid unless:
1. Person was unable to understand the nature of the transaction; and
2. The other party knew that to be the case.

If these apply - the contract will be voidable NOT void.

Question 23

When is a corporation not a capable party of entering into a contract?

Answer 23

Only have capacity if have been incorporated by the state. If just an association of people not incorporated then NOT a seperate legal personality.

Three types of corporation:
1. Registered companies (if entered into by director binding if even beyond companys constitution);
2. Statutory corporations (inc local authorities). Statute will state what extent contracts can be entered into. If contract extends beyond these powers it will be ultra vires and VOID NOT VOIDABLE; and
3. LLPs.

Question 24

What are the 3 ways terms can be incorporated into a contract?

Answer 24

1. Signature (only not incorporated if terms have been misrepresented to do).
2. Reasonable notice before or at the time of the contract. Court will look at the following to decide if reasonable notice has been given:
   (a) Nature of document (ticket after paying for hire of chair was not the sort of doc you would expect terms);
   (b) Timing - cannot be afer contract formed must be before or at time (quote not invoice);
   (c) Onerous terms, the more onerous they are the more a party must do to bring the attention to the other party
   (d) Any exemption clause must be legible
   (e) If terms are on back does the front say “turn over”?
3. Previous consistent course of dealing:
   - Must have LOTS of dealings
   - Exactly the same terms and conditions
   - Doesn’t matter if sometimes those terms on back of invoice AFTER contract

Question 25

Classification of terms - when can you sue for damages and when can you terminate?

Answer 25

Can sue for damamges for every breach of contract, can only sometimes termination.

1. Breach of condiiton - can terminate provided you haven’t affirmed contract - as well as claim damages. Even if breach is not serious it is an important term;
2. Warranties - can only ever get damages no matter how serious the breach is;
3. Innominate terms - Depends on the seriousness of breach.

Sometimes warranties and conditions are labelled as such in the contract. This is only binding if drafted by lawyer. If drafted by lay person may not be binding. Must look at all circumsatnces and decide if parties intended for termination for term.

Sometimes terms are judicially recognised as a condition or warranty.

Question 26

What is an innominate term?

Answer 26

A term that it is not known if it is a condition or warranty until the breach has ahppened. The seriousness of breach dictates.

Fir Shipping Co Ltd v Kawasaki - seaworthiness clause, may be breached in a spectrum of different ways ranging from the serious to the
insignificant. So rather than classify such clauses at the outset the Court of Appeal introduced a ‘wait and see’ approach. In other words the remedy would depend on the ultimate effect of the breach.

Question 27

How do terms get implied into contracts?

Answer 27

1. Custom (well known legally binding customs of a trade but NOT if it contradicts an express term of contract).
2. Fact (this happenes if the contract would be unworkeable without the term - parties are said to imply terms into the contract that make commercial sense of their contract).
3. Law (e.g employers have a duty to provide a healthy and safe work environment, employees have duty to provide honest and loyal service)
4. Statute (CRA, SOGSA, SOGA)

Question 28

Important conditions under the Sale of Goods Act (B2B)

Answer 28

s12(1) right to sell the goods
s13 (1) goods correspond with description
s 14(2) satisfactory quality (meet standard reasonable person would regard as satisfactory.
s 14(3) if buyer makes known a specific purpose for buying the goods 9either expressly or impliedly) term that goods are fit for purpose unless:
(a) buyer does not rely on skill or judgment of seller
(b) it was unreasonable for the buyer to rely on skill/judgment of seller.

Question 29

Remedy for breach of s12-14 of SOGA?

Answer 29

Strict liability (seller need not be at fault)so reject goods, get refund and claim damages. The only bar to rejecting the goods are:

1. Buyer has accepeted goods by intimating acceptance or keeping goods for beyond reasonable time; or
2. where breach of (a) correspond with descript (b) satisfactory quality and (c) fitness for purpose, are so slight it would be unreasnable to reject the goods.

Question 30

Important terms under SOGASA (B2B)

Answer 30

Conditions:
2(1) Transfer of goods, transferor has right to transfer ownership of goods
3 supply of goods - goods match descriptiom
4(2) Goods supplied - satsifactory quality
4 (5) Goods supplied, makes known their purpose of good, reasonably relies of skill/judgement, fitness for purpose

Innominate terms:
13 reasonable skill and care of provision of service
14 service done in reasonable time
15 No price fixed for service, reasonable sum charged

Question 31

Important terms under CRA (Trader 2 consumer)

Answer 31

s9 goods sold/supplied, satisfactory quality

s10 buyer makes known to the seller their purpose for the goods (either expressly or impliedly) and reasonably relies on the seller’s skill/knowledge, there is an implied term that the goods will be fit
for that purpose

s11 sale/supply by description there is an implied
term that the goods will correspond with that description

s17 seller has the right to sell or transfer the goods at the time when ownership of the goods is to be transferred

s49 implied term that it will be carried out with reasonable care and skill

s51 If a price for work or a service has not been fixed, there is an implied term that a reasonable sum will be charged

s52 work or a service is done in the course of a business and no time for performance has been agreed, it is implied that the work will be done within a reasonable time

Question 32

Breaches re goods under CRA i.e s9-11, what are the remedies?

Answer 32

Breaches for correspondence with description, satisfactory quality and fitness for purpose. Following rights:

1. Short term right to reject and get a refund - 30 days (unless agreed otherwise) after been bought, delivered and installed. Pershables? no longer than goods could reasonable be expected to last;
2. Right to have the product fixed or replace (if appropriate); and
3. Reject and get a partial refund to reflect consumer’s use of goods.

other 2 remedies - 6 months. Except perishables. Exception: if can show goods corresponded to contract on day of purchase.

Pecking order!!

If the above remedies are not adequate to compensate can still claim for damages - right to damages are not effected by the above remedies.

Question 33

CRA - where work does not correspond to contract due to reasonable skill and care (implied) or express term re performance, what are the consumer’s rights?

Answer 33

1. Require repeat performance (where reasonable); or
2. Price reduction.

Breach of reasonable time - price reduction.

Question 34

What are the two TESTS to consider for an exemption clause in a contract?

Answer 34

1. Is the clause truely a part of the contract;
   - as above: signature, reasonable notice or previous course of dealngs (consistent); and
2. Does the clause exempt liability for the particualr breach or loss suffererd (construction).
   - “cars parked at own risk” - only excluding damage to car and not PI
   - Any ambiguity in exclusion? **contra proferentum rule ** this means the exemption caluse will be construed AGAINST the person seeking to rely on it
   - Seeking to exclude liability for negligence? Clause must be SO clear:
   ‘The Company is not responsible for damage
   caused by fire to customers’ cars on the
   premises.’ - only excludes accidents and NOT negligence.
   Car insurance policy excluded liability for
   damage ‘caused or arising whilst the car is
   conveying any load in excess of that which it
   was constructed for’ - load only cases where spcific weight exceeded like with vans or lorries. NOT for 5 people in car instead of 6.

Question 35

Requirements of UCTA?

Answer 35

B2B

Cannot exclude liability for personal injury or death
Must satisfy reasonableness test clause must have been a fair and reasonable one to be
included in the contract. And we judge that at the time of the contract by taking into account all
the circumstances including what the parties knew or ought to have known at that point in time.

Elements:
1. Fair
2. Reasonable
3. Regard to all circumstances (iinc what parties knew or ought to have known when entering contract)
4. Judged at time of contract

Relates to:

(a) loss or damage by neggy
(b) Can’t exclude or limit liability for SGA s12, s13, 14 or 15; SGSA cannot elude or limit for quality, fitness or description. Nothing about s13, 14 or 15.
Express term in writtern terms

Consider bargaining position of parties, did they agree clause for lower price (seems far to allow), is it in small print, are they experienced business men. is risk insurable. Could customer have gone else where without exemption clause. If need to comply iwth condiiton (e.g notify defects in 7 days) is it reasonable to expect compliance. Set out in Sch 2 of Act. Sch 2 guidelines

COURTS MUST HAVE REARD TO THE SCH2 GUIDELINES IN CASES INVOLVING SALE OR SUPPLY OF GOODS.

Question 36

Requirement of CRA?

Answer 36

Consumer 2 Trader - Defendant must be acting in Course of business!

A term in a sales contract is not binding on the consumer to the extent that it would:
(a) exclude or restrict a right or remedy in respect of breach of ss 9–11 (goods, descript, fitness non excludeable);
(b) make such a right or remedy or its enforcement subject to a restrictive or onerous condition;
(c) allow a trader to put a person at a disadvantage as a result of pursuing such a right or remedy; or
(d) exclude or restrict rules of evidence or procedure.

s9-11 non excludeable

Similarly, s 57 of the CRA 2015 effectively provides that a trader cannot exclude (compare
restrict) liability for breach of s 49 (the implied term to perform a service with reasonable care and skill). This also includes preventing an obligation or duty arising in the first place.

Cannot restrict liability for reasonable price and time.

Only one you can limit but not exclude is skill and care,

Question 37

Can an exemption clause protect a third party?

Answer 37

General rule - no. Privity of contract.

Adler v Dickson - Her contract was with the shipping company and contained an exemption clause. She sued the master and boatswain alleging negligence in not securing the gang plank. The court held that the master and boatswain were not protected by the exemption clause as they were not parties to the contract.

Exception Contract (Rights against third parties) act 1999. Can benefit if named by name or class in the exemption clause. Can rely on to same extent as contracting party.

Question 38

What damages will the Court award if there is a breach but no loss?

Answer 38

Nominal damages. No substantial damages.

Question 39

What is the aim of damages

Answer 39

To compensate the claimant for their loss and put them back in the position (as far as money can do) as if the contract had been performed correctly.

NOT to PUNISH victim. Who cares if they make a profit.

Question 40

To be awarded damages, what do you need to show?

Answer 40

That the breach has actually caused the loss. Usually just application of common sense.

Question 41

Looking at someone’s position as is and comparing it to the position C would have been in if contract performed correctly. What is this called and what needs to be considered in terms of amount? (it is a type of damages)

Answer 41

Expectation loss or loss of bargain (lost full benefit of bargain they struck). Uusal measure of damages.

-If someone refuses goods, can sell elsewhere for certain amount take that off. Don’t want to be overcompensated
- Take off an expenses - just want to be awarded the proft

Question 42

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Instead of claiming damages for expectation loss or loss of profit, what can you claim?

Answer 42

expenses incurred because of reliance on the contract being performed. Called reliance loss.

Usually done where profits hoping to arise from the contract are too speculative.

Anglia Television v Reed - engaged the defendant, an actor, to play the leading role in the production of a play for television. The defendant later refused to carry on with the contract and Anglia was forced
to abandon the production as it could not get a substitute. Anglia claimed as damages all of the expenditure that they had wasted on the production, which included such things
as director’s fees, designer’s fees and stage manager’s fees.

Court awarded wasted expendiutre - inc expenditure incurred pre contract.

Question 43

When can you be awarded the non-pecuniary loss for disappointment or mental distress

Answer 43

One object of the contract was to provide pleasure or peace of mind. E.g holiday contracts & weddings.

Jarvis v Swans Tours [1973] - house party holiday in Switerland, 2 weeks holiday. Only 13 guests in first week and none in second week. Holiday did not comply with description. Loss of enjoyment damages of £125.

Question 44

Rules for remoteness of loss?

Answer 44

Hadley v Baxendale: the loss will only be recoverable if it was in the contemplation of the parties at the time of entering into the contract.

Limb 1:Is the particular loss an inevitable/natural consequence of breach (direct loss); or

Limb 2: Did the defendant know of special
circumstances making the loss a likely consequence of breach? (indirect loss)

If no to both then loss is too remote.

As long as the type of oss is not too remote then the extent of loss is irrelevent.

Parsons (Livestock) Ltd v Uttley Ingham [1978] pig farmers, bought a hopper for big food, D forgot to unseal vent in hopper, pig food got moulgy and pigs contracted RARE infection and died. Illness of pigs inr easoabel contemplation of parties, death ofpigs not too remote (even though rare disease).

Question 45

What is mitigation of loss?

Answer 45

Claimant must take reasonable steps to mitigate loss. Any part of loss due to failure to take reasonable steps will not be recoverable.

Question 46

Who has to prove failure to mitigate? What if acted reasonably but attempts to mitigate failed?

Answer 46

1. Burden of showing failure to mitigate loss is on D (may be difficult)
2. If acted reasonably can claim for their loss even if reasonable attempts to mitigate have failed to reduce their loss, or even increased it.

Question 47

How to quantify damages?

Answer 47

if work is defective the normal measure
of loss is the cost of putting it right – the cost of reinstatement, or so-called ‘cost of cure’.

If goods are defective, starting point for the law is the difference in value between the goods (as they are) and the goods as they were expected to be.

Ruxley - loss of amenity. No difference in value but big cost of cure. Pool was meant to proivde pleasure and amenity so loss of amenity was the true loss. If mundane construction may have got nothing no loss of value or amenity and curing defect unreasonable. If depth of pool had been critical (think olympic pool) the full cost of cure would be awarded.

Question 48

Specified damages?

Answer 48

LDs. No need to prove extent of loss just need to prove breach.

Must be genuine attempt to pre-estimate loss. Binding. Usual rules of measure of damages, remoteness and mitigation do not apply.

Penalty - attempt to put pressure on a party to perform the contract because the sum stipulated is extravagant or otherwise disproportionately high. Unenforceable. COurt assess damages in usual way.

Question 49

How to work out if LD clause is a penalty?

Answer 49

Cavendish Square - provision could not be a penalty unless it provided an exorbitant alternative to ordinary damages.

The fact that the clause was not a genuine pre-estimate of loss did not necessarily mean it was penal. real test of a penalty clause turned on whether the means by which the contracting party’s conduct was to be influenced were unconscionable or extravagant. This was formulated as a test of whether the clause imposed a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the contract.

ParkingEye - Parking notice says it is limited to 2 hours and fee of £85 imposed fir iver staying. D argued unenforceable as a penalty. Whilst ParkingEye suffered no loss, legitimate interest in receiving income to meet costs of running car park. Legit way to regulate efficient use of care park.

Question 50

What are the 4 limitations on awards of damages?

Answer 50

1. Type of loss (loss of bargain/loss of profit or reliance loss. Pecunairy / non-pecuniary loss)
2. Remoteness (direct / indirect H v B)
3. Mitigation (reasonable steps)
4. Specified damage (LDs, is it a penalty? Consider genuine pre-estimate of loss or does clause impose detriment out of proportion to the interest under contract? Consider legit business interests like in Parking-Eye. Not simple enought to say “not pre-estimate of loss”).

Question 51

What is an action for an agreed sum?

Answer 51

Debt action - suing for fixed amount.

Question 52

When won’t injunction be awarded?

Answer 52

Discretion of court - not when damages are adequate.

Not to compel D to do acys that they could not be ordered to do by specific performance (also discret. remedy - land). Will not grant injunction to force employee to work for employer.

Page One Records v Britton - manager got fire from band, tried to get injunction to stop group hiring another manager. Refused, if could not hire manager would ahve to hire C.

Question 53

What is restitution?

Answer 53

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

Money paid under contract but total failure of consideration
Payer can bring claim to recover money paid if total failure of consideration (has not done ANY PART of what they were supposed to do udner the contract). You hire me to retile your ktichen, you paid, I did NOTHING. Say I paid £500 i would get that back. If I needed to pay £800 to hire someone else, I would want to bring a claim for damaes of £300 (expectation loss). Bring action as well as or instead of rest.

If started job and abandoned then wouldn’t be claim in restitution.

Compensation for work done or goods supplied
Two ways this can happen:

1. Contract broken
   One party supplies goods or done work, and other party breaches, party supplying may bring claim for reasonable sum for work or goods. Choice to bring a restitutionary claim for reasonable sum or claim in damages for loss of net profit on the project. This “reasonable sum” is called QUANTUM MERUIT
   Gavin agrees to build a garage for Ray. Gavin does some work and then Ray tells him to stop as he has changed his mind. He no longer wants the garage. Ray is in breach of contract. Builder can sue in restitution and receive quantum meruit or sue for damages.
2. Contract never formed.
   If contract never formed but builder does some work entiteld to reasonable sum for work (quantum meruit). British Steel Corp v Cleveland Bridge - D asked C to produce a variety of steel nodes for a construction project. Contract not finalised. Nodes prepared and delivered. Could not agree on terms of contract. Recover reasonable sym.

Question 54

2 measure of damages in contract?

Answer 54

Expectation measure (loss of bargain / loss of profit).

Reliance loss (wasted expenditure).

Either way it is compensatory and not a punishment.

Question 55

Line of remedies based on gains made by defendant?

Answer 55

takes such awards outside the strict principles of restitution, which usually comes to the aid of a
claimant when the defendant has made gains at the expense of the claimant. Here we are looking at gains hat do reflect the loss to the claimant.

General v Blake 2001 - traitor was secret service then agent for soviet union. Wrote autobiography, paid lots of royalties, no oss to crown as no breach of confidentiality. Nevertheless, it was held that an account of the wrongdoer’s profits was appropriate in these exceptional circumstances where it was a just response to the breach of contract.

Question 56

Restitutionary damages - negotiating a release fee?

Answer 56

Wrotham Park Estate v Parkside - land, restrictive cov. Built on land, made profit, sought mandatory injunction (rare) to demolish development. Development had caused no devalue in land. But C had lost change to negotiate a release fee. Awarded:

such a sum of money as might reasonably have been demanded by the claimants from Parkside as a quid pro quo for relaxing the covenants.

These are negotiating damages. NOT awarded when C has suffered clear financial loss as a result of breach. ND just a last port of call.

Question 57

Law of guarantee?

Answer 57

Secondary obligation. Evidence in writing - Statute of Frauds. If not is VOID! Just need some written evidence not actual contract in writing. Must exist pre creditor seeking enforcement -signed by guarantor.

Question 58

Indemnities?

Answer 58

Primary obligation - no need to be in writing.

Warranties (terms) allocates unknown risk. Indemnities allocates KNOWN risks.

Question 59

What is a repudiatory breach of contract?

Answer 59

Goes to the heart of the contract and deprives the party of the whole benefit - can affirm contract or terminate. Affirmation bar to termination.

Breaches of conditions or very serious innominate terms.

If breach also causes loss, can sue for this. E.g if cost more than outstanding payment to finish.

Can’t terminate contract if all of it has been performed. Only discharges future obligations.

work had not effectively deprived Sonia of the whole benefit she expected to receive under the contract then it would have been wrongful prevention

Question 60

What is frustration?

Answer 60

Party can no longer perform contractual obligation due to unforseseen event beyond its control (that happened after entering into the contract:

1. must make performance of contract impossible or radically different;
2. Out of the ordinary risks that parties can be treated as taking on board when entering into contract i.e unexpected
3. Beyond either control of party.

• subject matter destroyed in fire
• delay no frustrating event in itself - war delayed contract by years and this counted.

Metropolitan Water Board v Dick Kerr [1918] - EOT clause in contract, temporary dealys, first world war interrupted, not in contemplaiton ofparties at time of contract (unexpected) if resumed would be radically different.

Suez canal 1956 closed, voyages were more difficult and expenses. Not frustarting as can still perofmr just more difficult (unless specific route identified in contract) or precise delivery date agreeds, or goods perished etc//
14 month delay for building shortages is not frustration. Just more expensive and ifficult to perform. Could have forseen event. SHould have provided in contract.

Must not be in reasonable contemplation of the parties upon entering contract - if provision in contract then not unexpected. If parties have force majeure clause governing situation no need or room for frustration. However, illegality can never be provided for. Force majeure clauses governed by UCTA.

Can’t arise from fault of party alleging frustration.

The Super Servant Two - promise to use SS 1 or SS2. SS2 sank, and already contracted out 1 (and could only use 1 under contract). Self induces.

Contract impossible/radically different, unexpcted, not in control of parties.

Question 61

What are the consequences of frustration?

Answer 61

1. Future performance terminated automatically (no choice)
2. The Law Reform (Frustrated Contracts) Act (LR(FC)A) 1943:
   (a)Money paid before event can be recovered
   (b) Money that should have been paid before event need not be paid
   (c) Expenses incurred by payee can be recovered out of total sums paid/payable before event. Very wide discretion of Court to allow payee to recover expenses out of money paid and payable BEFOREE event.
   (d) Conferred valuable benefit? Can recoup a just sum. If destroyed before any use then probs not,

Court need not award maximum amount of expenses!!!!!!!! But max amount is paid before event and due before event!

Question 62

What is the doctrine of complete performance?

Answer 62

Performance of contractual obligations must be precise and exact. If performance not exact and precise, need not pay anything - but cannot recover money already paid unless total failure of consideration (restitution).

Exceptions to doctrine (paid some but not all price):
1. Divisible obligations
2. Substantial performance
3. Wrongful prevention
4. Voluntary acceptance of part performance.

Question 63

Complete performance - what are divisible obligations?

Answer 63

Contractual obligations are divisible if the parties have agreed specific payments for each distinct part or stage of the contract. Each part or stage is then treated like a separate contract and so once it has been completed the contractor is entitled to be paid in full for it

Question 64

Complete performance - what is substantial performance?

Answer 64

If a contractor has completed the agreed work but it is slightly defective they may not be entitled to the price, but they will be entitled to the price less the cost of putting right the defect.

As long as defect does not cost MORE than 1 / 4 of contract price then probs substantial performance

Question 65

Complete performance - what is wrongful prevention?

Answer 65

If a party is wrongfully prevented from completing their contractual obligations they will be entitled to either damages or a** reasonable sum in restitution** for what has already been done.

If employer terminates contract but nto serious enough breach, wrongufl prevention (wrongufl termination) and is a repudiatory breach in itself. Think - telling someoen to stop without good reason. Entited to loss of profit or reasonable sum in restitution.

If good reason for termination - get job for nothing. if loss from breach, claim damages.

Question 66

Complete performance - what is voluntary acceptance ofpart performance?

Answer 66

Where a supplier of goods or services partly performs their contractual obligations and the other party voluntarily accepts the partial performance then the supplier is entitled to a reasonable sum (quantum meruit) for what they have done. MUST HAVE GENUINE CHOICE TO ACCEPT!

Sumpter v Hedges [1898] - agreed to construct to houses for £565, abonded project after £333, D completed work himself using materials on site. Builder try to claim reasonable sum for work done and materials. Got nothing for work done as D had no choice but to accept part performance. Got reasonable sum for materials as didn’t have to use those.

Question 67

What are the 3 categories of pre-contract statements?

Answer 67

1. Sales puff
2. A contract term
3. A representation

Question 68

What are the tests to decide what category a pre-contract statement is?

Answer 68

Main test: common intention of the parties when they entered into the contract. If this not clear, use following guidelines:

1. One party had greater skill or knowledgement on matter of contract?
2. Verbal statement repeated in contract
3. Did recipient of statement make clear it was vital (term)
4. Did maker of statement invite other to verify the statement (may be a representation - if said “don’t bother checking” probs a term”
5. lapse of time between statement and contract

Thnik case of motorbike, said ti was 1992 a week before contract. not in contract. Relied on reg docs and had no special skill. Rep.

Question 69

What is a misrepresentation?

Answer 69

Untrue statement of fact, made by one party, by words or conduct, which induced the other to enter contract.

1. Untrue statement

Spice Girls v Aprilia World Service BV - participating in the filming of a TV commercial, the pop group Spice Girls represented that they did not know or have reasonable grounds to believe that any members intended to leave. 1 member had given notice.

Silence only misrep if:
- fiduciary relationship
- Utmost good faith contract (insurance)
- Half-truth(car has “one lady owner” but also a man owner)
- Statement was true, facts changed, didn’t inform them

2. Statement of fact (not opinion or future intention)

However, if lie about intention or state opinion on no basis of fact then these can be considered statement of facts. This is due to lying about your statement of mind, or representing they are in possession of facts which forms their opinion.

3. Statement must be made by one contracting party to another

If said by someone else not a rep. Look at torth of misstatement!

4. Statement must induce

Must haverelied on the statement. I.e not if hired an expert to verify. Need not be only inducement! Just needs to be at least a reason.

Question 70

Level of damages for misrepresenation?

Answer 70

1. Fraudulant misrepresentation
2. Negligent misrepresentation
3. Innocent misrepresentation

Question 71

What is fraudulant misrep? What are the damages?

Answer 71

Made statement:
1. That you know was not true;
2. Without belief in its truth; or
3. Not knowing if it was true but not caring.

NEED PROOF Of FRAUD - DIFFICULT.

Tortious damages - the tort of deceit. Measure: how must is representee “out of pocket” due to misrep. The remoteness of loss does not come into it ALL consequential losses ! very onerous.

East v Maurer [1991] - fraud misrep hair dresser salon seller. Bought business on false assertion that hair dresser intended to stop working at his other hair salon in town. Did not. Business unsuccessful due to unexpected competition. Sold at a loss. Tortious principles to cal loss:

• Innocent put in position would have been in had the false rep not been made. I.e would not have brought the salon! Brought similar one instead.
• Awarded damages representing difference in profit he made v profit would have made if brought similar one.

If normal loss of bargain damages would have got diff between what he made and if statement was true.

Question 72

What is negligent misrep? What are the damages?

Answer 72

Negligent misrepresentation concerns statements that were made carelessly. These statements are governed by s 2(1) of the Misrepresentation Act (MA) 1967. Even if honestly held belief, it was not on reasonable grounds.

**Burden of proof reversed **- C has to show misrep and losse that flow, then D has to show it was reasonable. Has to show ‘honest and reasonable’ - hard to do.

Howard Marine & Dredging v Ogden - capacity was about 1,600 tonnes. He based this figure on his recollection of the relevant entry in the Lloyd’s Register, which stated that the capacity was 1,800 tonnes. The capacity was in fact much less, and the representative would have discovered this if he had consulted the ship’s documents. The charterers later sought to
claim damages from the defendant. D failed to prove said on reasonable grounds, only consulted Lloyd’s reg and not ship docs.

DAMAGES ASSESSED IN SAME WAY - i.e tortious. No remoteness of loss, all consequential losses. Put in position as if tort not happened.

Question 73

What is innocent misrep? What are the damages?

Answer 73

If the misrepresentor can establish that they had reasonable grounds to believe their statement was true, then this would still be a misrepresentation, but one that falls into the innocent misrepresentation category.

NO DAMAGES - may be able to rescind if availible.

Question 74

What do all misreps have income (despite the type)?

Answer 74

All contracts are voidable (NOT VOID). Have a chouce:
1. Affirm; or
2. Rescind (if possible). - setting aside, can be awarded as well as damages

Question 75

What does misrep rescission entail

Answer 75

Putting parties back into (as far as money can do) their pre-contractual position. Mutual restoration of benefit.

Equitable remedy - discretion.

There are 4 bars to recission:

1. Affirmation;
2. Undue delay;
   Leaf v International Galleries - bought picture, 5 years later realised it wasn’t what they said it was. Had a chance to inspect a few days after purchase and didn’t. Bar to recission. Court look at when misrep should have been discovered.
3. Innocent purchaser acquired interest (bone fide purchaser); or
   Car & Universal Finance v Caldwell [1964] - rouge bought car and sold due to misrep, when innocent discovered misrep, notified police & had car transferred back into his name. Innocent party was sold the car after, but has contract rescinded before the innocent had interest, didn’t stick.
4. impossible to substantially restore goods/prop.
   Crystal Palace FC (2000) Ltd v Iain Dowie [2007] - practical justice, if rescinded would revive Ds old employment but already had new employment. Can have both. This is reason contract of sale for business is rarely rescinded - business to likely to have changed its position.

Question 76

What is duress and what is the remedy?

Answer 76

llegitimate pressure such as:
1. Violence;
2. Illegitimate threats or pressure (business threats such as taking business elsewhere, sell to competitor not duress);
3. That coerce’s a party into entering a contract or varying a conract.

The ONLY remedy is rescission and NOT damages. Contract is VOIDABLE. Must:
- notify other party it wants to rescind
- innocent party can apply to Court for notice of rescission. Do this if otherside refused to return money or prop.

When a contract is rescinded, neither party need perform any future obligations and each party should return money or property transferred under the contract.

Question 77

Where is burden of proof for duress? What amounts to illigitimate pressure? Types of duress?

Answer 77

Burden of proof? On party that alleges it.

Economic duress & duress to person (physical violence -
Duress need not be the only reason for entering into a contract, but it must be a reason)

Illegitimate pressure:
1. NOT legit business threats (e.g i’m taking my business elswhere or sell to competitor)
2. Carillion TEST for what must be proved to establish economic duress

Carillion Construction Ltd v Felix (UK) Ltd [2001] - must be pressure:
(a) result is there is lack of practical choic for victim;
(b) illegitimate; and
(c) which is a signficant cause inducing C to enter contract. Note, duress to personjust needs to be one of the reasons, not signficant cause.

Court will consider the following for illegit pressure:
- actual or threatened breach of contract
- threat made in good or bad faith
- did victim protest?

Question 78

What is a voidABLE contract?

Answer 78

A voidable contract is a valid, binding contract unless, and until, it is rescinded by the innocent party. On the face of it, the innocent party can either rescind or affirm the contract (ie treat it as ongoing), but once they affirm the contract, the innocent party cannot then change their mind.

Question 79

Bars to rescission for duress?

Answer 79

Bars to rescission same for duress as misrep:

1. Affirmation;
2. Bonefide purchaser;
3. Undue delay; or
4. Cannot restore property or goods.

Affirmation & undue delay - North Ocean Shipping v Hyundai Construction (The Atlantic Baron) [1979].
Building started on ship, economic duress demanded more money. No practical choice but to accept. 8 months later C wanted extra money back on grounds on duress. Court refused recission of variation:

1. When paid money no actual danger, goods already delivered. Affirmed contract - shouldn’t have paid extra money!; and
2. Waited 8 months (delay).

In Woolworths case, agreed, did not pay then used economic duress as defence. Won.

Question 80

Variation made by duress

Answer 80

• Could you argue no consideration for promise to pay more? (Beware - may be a practical benefit!)
• If practical benefit but promise to pay more was under duress - will be voidable
• NOTE: only the variation in above will be voidable (i.e promise to pay more) not whole contract.

Question 81

What is undue influence? What is the difference between this and duress?

Answer 81

Doctrine similar to duress but more to do with influencing a party in a weaker position:
1. Influence that goes beyond what is acceptable
2. where one party is in a position to influence the other and takes unfair advantage.
Not threats or violence. Indentify relationships that are unequal and see if influences becomes “undue”.

Same remedies (rescission no damages).
Same bars to rescission.

Question 82

Types of undue influence and the burden of proof.

Answer 82

1. Actual undue influence
   - Hard to prove
   - Daniel v Drew [2005]: evidence supported by witness. old lady hated confrontation, scard of newphew and going to court. Nephew threatened to take her to court if she didn’t sign contract. She felt unable to refuse.
   - Unlike duress as can be entirely legal
   - Actual needs to be proved on facts (usual burden of proof). Hard as often goes on behind closed doors.
2. Presumed undue influence
   Two factors need to be present to have presumed UI:
   (a) relationship of trust and confidence (sometimes presumed, if not must prove);
   (b) a transaction that calls for an explantion.

(i) Trust and confidence

Relationships with irrebuttably presumed one party places trust and confidence:
- solicitor and client
- doctor and patient
- religious advisor and followers
- Parents and children under 18

Not presumed:
- husband and wife (must PROVE put trust and confidence on them). E.g Did wife place trust and confidence in husband for financial matters?

Case where trust established on facts - O’Sullivan v Management Agency 1985. Gilbert O’Sullivan, a young, unknown singer/songwriter, and his
manager. Set aside agreements / trasnfer of copyright etc for music.

(ii) Transaction calls for explanation
- e.g enter contrract not for their benefit and exposes to risk

Presumption of undue influence CAN be rebutted - but presumption of trust and confidence in solicitor, doctor etc cannot.

Question 83

Undue influence and third parties - relevant cases & tests?

Answer 83

Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449. The wife successfully argued that the bank had constructive notice of her husband’s undue influence and so should not get possession of the house.

Constructive notice:
1. lender ought to have been put ‘on inquiry’;
2. it did not take reasonable steps to ensure that the surety was aware of the implications of what they were signing.

(i) put on inquiry
relationship between the debtor and surety is non-commercial and the loan is not for their joint benefit. If lie on app to say for holiday home not on inquiry.

(ii) reasonable steps
(1) The creditor could have a private meeting with the surety to explain the risks and advise the surety to take independent advice.
(2) There are clearly risks involved with this first option and what creditors tend to do is insist the surety takes independent advice from a solicitor. Once have cert from solicitor, liability is with them

Not always husband and wife! Credit Lyonnais Bank Nederland v Burch [1997] - employer who owned business and junior employee. Employee remortgaged flat to secure unlimited liabilities on business. Presumption of undue influence and the bank was stopped from enforcing the security. Even though several attempts to invite the employee to take independent legal advice were made, she did not do so. Lender should have insisted or not let give security.

Even if stopped from taking security’s prop will still have action against debtor. Financial position probs bad.

Question 84

What is “mistake” in contract law?

Answer 84

The doctrine operates only in exceptional circumstances where one party, or indeed both parties, can establish the contract was entered under a mistake that was so fundamental as to effectively negate agreement and therefore the existence of a contract.

Three types of mistake:
1. Common mistake (both parties made same fundamental mistake);
2. Cross-purpose mitake (parties at cross-purpose about some crucial aspect of contract;
3. Unilateral mistake (only 1 party - mistaken as to ID of other party).

If mistake is found contract is VOID!! Not voidable.

Question 85

What is common mistake?

Answer 85

• parties made same fundemental mistake
• Preceding impossibility whereas frustration is after contract

Limitations:
1. Both parties need to be at fault;
2. Mistake was be fundamental and render performance of contract impossible or radically different to anticipation; and
3. Needs to be no express provision in the contract for the matter.

E.g: both parties are mistaken as to the very existence of the subject matter of the contract. Jess agrees to sell her car to James, but unbeknown to either of them the car has already been destroyed in a fire. Their contract will be rendered void as there is nothing to contract about.

Mistake as to quality of subject matter not enough! Bell v Lever Bros [1932] - parties forgot about earlier breaches of service contracts so could have been dismissed without settlement agreement. Didn’t rememer so entered agreement. Court found not mistake - mistake was not fundamental enough to render the settlement agreements void.

Usually a last resort as mistake as to quality unlikely to make performance radically different.

Question 86

What is cross purpose mistake?

Answer 86

One or other party may assert that a contract exists, each on terms favourable to that party, objectively it is impossible to resolve the ambiguity over what was agreed. That being the case, the only possible
conclusion is that there was no contract.

Raffles v Wickelhaus (1864): 2 ships name Peerless, one sailed in Oct one in Dec. Both parties thought it was the other ship. On an objective analysis there was no way to resolve the ambiguity so the court found for the buyer, ie the contract was void.

Question 87

What is unilaterial mistake?

Answer 87

One party mistaken. Usually identity of other party. Only mistake where identity is of vital important and not if it is just to do with attributes or creditworthiness.

Cundy v Lindsay (1878) - A rogue set up business under the name ‘Blenkarn’ at 37 Wood Street. A reputable company Blenkiron and Co traded at 123 Wood Street. The plaintiffs sent the goods to ‘Blenkiron and Co’ at the rogue’s address. Before the rogue paid for the goods, though,
he resold them to innocent purchasers. As bonefide purchaser, can’t rescind for misrep but if contract void it never existed (and C always owned goods) so relied on unilateral mistake. Their argument succeeded and the contract was held to be void for mistake. Innocent purchaser can still sue rogue for damages if they can be found. Sue for not having title to goods under SGA.

Court tends to have less sympathy for mistaken party. Rarely succeeds in face to face situations.

Lewis v Averay [1972] - advertised to sell car, the man who turned up claimed to be the well-known actor Richard Greene. He signed a cheque ‘R.A. Green’ and produced photographic identification in the form of an official pass for Pinewood Studios. Mna let him take car and log book in return for cheque. Which bounced (fraudster). Man sold car to innocent puchasers. Needed to rely on mistake. plaintiff had been more concerned about the creditworthiness of the man, rather than what he actually called himself. So it was a mistake as to an attribute (rather than identity).

Question 88

Misrep or unilateral mistake?

Answer 88

1. Face-to-face? Strong presumption that the innocent party intends to deal with the person in front of them (ie the rogue). Unlikely to be void for mistake but may be voidable for misrep if no bonefide purchaser.
2. Exclusively in writing? Above presumption does not apply. Instead, the written agreement must be construed to determine with whom the innocent party intended to contract. If it was with someone other than the rogue then the contract might be void for mistake.
3. Nature of transaction means it is vital they posses an attribute - consider man selling painting pretending to be famous artist.
4. If the person/entity who the rogue is pretending to be actually exists and **is known to the mistaken party (eg a registered company) **it suggests the offer is not addressed to the rogue. So again there could be no contract with the rogue: it would be void.

Question 89

When is a contract illegal? What does this mean?

Answer 89

Contract will be VOID if illegal.

Can be:
1. illegal at time of contract as relate to crime; or
2. illegal due to way they are performed.

For no. 2 above, if illegal act purely incidental to contract, unlikely to be void. Enough that wrongdoer punished for what they did. For example a
contract to deliver goods would not be voided if the driver delivering the goods was caught speeding.

Where performed illegally, possible for either party or only 1 party to intend illegal performance. Where both parties were aware that performance was illegal then the courts tend to take the view that neither party should be entitled to enforce the contract; the contract is void.

Ashmore, Benson, Pease & Co Ltd v AV Dawson Ltd [1973] - D agreed to transport boiler for C. Carried on lorries that could not lawfully carry them. C knew this was the case. Boilers damaged in transitand sued for damages. Claim rejected as illegal and void. Owner knew about illegality so participated.

On the other hand, where one party did not know of the illegal performance of the contract by the other party, the innocent party may be able to enforce it. Clearly the illegal performer should not be permitted to enforce the contract

Question 90

What type of contract is illegal at common law?

Answer 90

Contrary to public policy or morality, eg contracts that challenge the sanctity of marriage, contracts that are sexually immoral and contracts that seek to challenge the jurisdiction of the court.

Question 91

Can any common form clauses be void due to public policy? If so, what is the remedy?

Answer 91

“Restraints of trade” clauses:

1. Covenants in employment contracts restraining senior employees from working for a competitor hen employment ends;
2. Clauses in sale and purchase agreement of a business stopping seller setting up competiting business near by.

However, restraints of trade clauses might be enforceable if:
- Legit business interest to protect customers, employees and trade secrets; AND
- The restraint is reasonable in terms of (a) geographical area (b) duration AND (c) scope of prohibited activity.

E.g coach co in north of west england, lots of employees e.g coach drivers, BD managers, senior execs. Probs no legit business interest to stop coach drives as probs no confidential business secrets (unlikely to affect business badly). Senior employees - may have legit business interest, need to be reasonable restraints. Would be unreasonable to say cant work in scotland as coach op, or saying can’t be tour op when only a coach op. Longer duration less likely to be reasonable. Think, how senior?

If a restraint of trade is reasonable then the party who imposed it may apply for injunctive relief to prevent or curtail a breach or otherwise apply for damages to compensate for loss suffered as a result of the breach.