Injunctions & Rescission Flashcards
Definition of Injunctions & Rescission
Injunction: is an equitable remedy that orders a party to refrain from a certain act or mandates them to perform an act. It can be used to order a party from proceeding with their breach of contract in a situation where, for example, the breach will automatically injure the other party. It can also be used to prevent the defaulting party from benefiting from his breach. As with SP, an injunction will only be granted where damages would not suffice.
E.g. It may be granted in a situation where an employer is aware an ex-employee is about to share his trade secrets with his new employer and they’re about to start producing his product. Were he granted damages, it would not be sufficient as what the employer would want is to stop the production altogether.
Rescission: is where the innocent party brings the contract to an end and cancels his obligations under the contract. He simply wants to be absolved of his obligations under the contract and does not seek damages, injunction or specific performance. He is petitioning the court to put him in the position he would’ve been in had the contract not been performed.
Note that when a party is seeking damages, the claim will be for repudiation (to be placed in a position as though the contract had been performed), not rescission.
5 Types of Injunctions
Interim/Interlocutory Injunction:
Mandatory Injunction:
Prohibitory Injunction:
Mareva Injunction:
Quia timet (“because he fears”)
Interim/Interlocutory Injunction:
This is an injunction that is sought to maintain the status quo b/w the parties pending a hearing and ruling on the matter. The party seeking the injunction does so at the risk that, were the matter decided against him and an injunction ought not to have been granted, he would have undertaken to compensate the other party for any loss. E.g. Adam is the sole dealer for Mercedez and in breach of their agreement, Mercedes decides to trade with Moses. Adam may seek an interim injunction to prevent Moses from selling Mercedez’s products until the action he brings in court is decided.
Prohibitory Injunction:
These would follow an interim injunction once the case is decided. It seeks to prevent/prohibit the other party from doing something.
Mandatory Injunction:
This is where the court mandates a person to do a particular thing. It is similar to SP in that they’re both orders to do something.
Mareva Injunction:
This is a freezing order granted where the subject matter of the dispute needs to be preserved. E.g. Adam buys equipment from Eve and becomes aware that Eve, in breach of their contract, has sold the same equipment to Moses and is about to move the equipment to Moses. Adam is aware he’s already paid for and has the right to the equipment. Adam may petition the court to grant a mareva injunction, effectively freezing the delivery.
Quia timet (“because he fears”) Injunction:
An injunction to restrain wrongful acts which are threatened or imminent but have not yet commenced. E.g. Adam becomes aware that his ex-employee, in breach of a NDA, is about to leak trade secrets to Awoko newspaper. Adam may apply for a quia timet injunction against Awoko to preempt their publication. The secrets have not yet been published but publication is imminent in essence.
