L9: Remedies Flashcards
State the 2 types of remedies
Common-law & Equitable Remedies
Explain damages and the purpose of it
It is a monetary compensation awarded to the injured party in an event of a breach of contract by the defaulting party.
It is to put the innocent party, as far as money can do it, in the same position as if the contract have been performed by the other party.
3 Categories of Damages
- Pecuniary Losses
- Non-pecuniary losses
- Liquidated Damages
What is the exception to the claim of non-pecuniary loss
Where the main objective of the contract is to provide enjoyment, comfort or sentimental benefits
State the two assessments of damages (the 2 important limitations)
- Remoteness of Damages
2. Mitigation
Explain Liquidated Damages
It is a term in the contract that fixes in advance a sum payable in the event of a breach.
It is the genuine pre-estimate of loss and the plaintiff is entitled to claim the amount stated in the LD. He doesn’t need to prove his actual loss.
Explain penalty clause
It is a term in the contract which provides for payment of a sum that is far greater than the genuine pre-estimate of loss.
It is to punish the party for a breach of contract and pressurize them into fulfill his obligations.
The court will not allow the penalty to be recovered and the plaintiff must proof his loss and the court will fix an amount of damages payable.
Explain Quantum Meruit
A party is claiming for a reasonable sum for amount of work done.
3 Types of Equitable Remedies
- Specific Performance
- Injunction
- Rescission
Explain Specific Performance
It is a court order that orders a party in breach to do what he had promised to do under the contract.
It is granted when monetary damages are inadequate to compensate the plaintiff.
It is usually granted to items of unusual beauty / rarity or which is limited in supply. It also applies to the sale of land / sale of a house as monetary damages are inadequate to compensate.
It is not granted for contracts for personal service as it is improper to make an employee to serve an employer against his will. It is also for contracts with continuing obligation.
State 2 types of injunctions
Prohibitory and Mandatory Injunction
Explain Rescission
A voidable contract set aside and parties are restored to their pre-contractual position.
