Contract Law - Termination & Remedies

Question 1

Discharge by Breach

Answer 1

S40 - when a party refuses to perform/disables himself from performing, promisee may end contract unless he has signified agreement to continuance

S76 - person who rightly rescinds contract is entitled to compensation for any loss he sustained through non-fulfillment of contract

Question 2

Remedies

Answer 2

course of action available to an aggrieved party when the other party breaches the contract

Question 3

Damages

Answer 3

to compensate for loss incurred by contracting party as a result of breach of contract

2 types of loss:
* normal loss
* special loss

Question 4

Normal Loss

Answer 4

• arises according to usual course of things from breach
• presumed to be within contemplation of parties

Question 5

Special Loss

Answer 5

• special circumstances
• defendant is aware/presumed to be aware at time of contracting

Question 6

Assesment of Damages

Answer 6

S74(1) - injured party is entitled to receive from the party in breach a compensation

Question 7

Hedley v Baxenbale

Answer 7

Plaintiffs were millers. Crankshaft of engine which operated the mill broke. This was the only crankshaft they had. They ordered a replacement, and contacted defendent to deliver the following day. Due to defendant’s delay, it did not arrive until a week later. Mill was out of action for longer than anticipated. Plaintiffs sued for damage (loss of profit)

Held: loss did not fall under normal or special loss = no damages granted

Question 8

Specific Performance

Answer 8

Specific Relief Act 1950 - court order directing that contract shall be performed specifically in accordance with terms of contract

Question 9

Specific Performance Not Granted When

Answer 9

• damages are an adequate remedy
• where court cannot supervise its enforcement

Question 10

Injunction

Answer 10

Specific Relief Act 1950 - equitable remedy granted at discretion of court