Equitable and Other Remedies

Question 1

What is an action for an agreed sum?

Answer 1

There may be a debt action

• Don’t need to worry about remoteness, measure, mitigation

There must be money owed and due to C

• Someone completed a job, but hasn’t been paid back yet, they can sue for agreed sum + interest

Question 2

What are the remedies of specific performance and injunctions?

Answer 2

Specific performance – order compelling the defaulting party to perform

• Only awarded where the court feels it is just and equitable to do so
• Specific performance might apply in relation to sale/purchase of land, as each house is unique

Injunction – order stopping a party breaching a restriction in the contract

• Both remedies are equitable – awarded at court discretion
• Only awarded where damages are inadequate

Limitations to these remedies:

• Cannot get specific performance in relation to an employment contract
• Injunction not awarded if it would indirectly have the effects of compelling somebody to work for somebody else

Question 3

What is ‘restitution?’ Give some example scenarios

Answer 3

Aims to stop one party being unjustly enriched at the expense of the other party

Examples:

1) If you pay someone in advance to do something and they never show up/complete the work, C can recover the advance payment

• This means there has been a total failure of consideration

2) The contract has been broken where goods supplied or work done and then contract breached

• A asks B to build a garage and then A stops B halfway through to say they don’t want the garage now
• B can sue for damages or bring a claim in restitution
• B would get a reasonable sum for what he did

3) Contract never formed

• Work initiated before contract finalised
• C can get a reasonable sum for work done

Question 4

What are restitutionary damages?

Answer 4

Very exceptional case – C got an account of profits that D had made on the back of a breach; not necessarily a loss on C, but a gain made by D

Negotiating damages

• Can only be awarded where there is no mainstream financial loss, but the non-defaulting party has lost the chance to negotiate payment of a fee for releasing the other party from a particular restriction in the contract - C lost a chance to negotiate a fee for release of restrictive covenant for example
• Works on the basis that both parties would have been willing to negotiate and would have reached a hypothetical figure
• If you have imposed a restriction on the other, you won’t release it without charging them – if you miss the chance, this is relevant

Question 5

What are guarantees and indemnities?

Answer 5

Risk often reflected in price

• Student with no regular income gets a loan; loan has a high interest rate

One way to reduce the risk is by guarantee – secondary obligation to pay if contracting party doesn’t perform and must be evidenced in writing

• Personal guarantee from the student’s parent as an example
• Must be in writing or will be void and completely ineffective

Indemnity – primary obligation to pay in any event

• One party promises to reimburse the other party completely if a particular loss arises under the contract
• Do not have to be evidenced in writing