Remedies

Question 1

If the court decides that the term is a condition, and the contract has not been fully performed, the innocent party will usually have the option of…

Answer 1

…terminating the future performance of the contract, as well as obtaining damages for any additional loss suffered. This is so, even if he has only suffered minor loss or damage.

Question 2

If the court decides the term is a warranty, the innocent party..

Answer 2

…cannot terminate the contract but can only sue for damages for loss suffered.

The use of the word ‘condition’ raises a presumption that it is used in the legal sense, but this may be rebutted from evidence of the contract as a whole. Schuler v Wickman Machine Tool Sales Ltd [1974]

Question 3

If the term is classed as innominate or intermediate,

it is necessary to wait until…

Answer 3

…the breach of contract has occurred to decide whether the innocent party should be allowed to terminate the future performance of the contract.

If the breach deprives him of substantially the whole benefit of the contract he can terminate, but not otherwise. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962]

Question 4

What remedies are available under common law (and therefore available as of right provided any relevant conditions are fulfilled?)

Answer 4

Damages, termination and action for an agreed sum.

Question 5

If the contract provides that one party shall pay a definite sum of money to the other, then if the duty to pay has arisen but the payer refuses to pay, the payee can bring a claim for…

Answer 5

…the agreed sum.

This is not a damages claim so the remoteness and mitigation rules do not apply. It is a very straightforward claim for the amount due, ie a debt action.

Question 6

To bring a claim for an agreed sum, the duty to ? must have arisen.

Answer 6

…pay.

Question 7

If a breach does entitle a party to terminate, the breach is often said to be…

Answer 7

…repudiatory.

Question 8

If the innocent party has the right to terminate the future performance of the contract, he does not have to do so. He has a choice. He can either…

Answer 8

…terminate the contract or affirm it, although in reality there may be no choice if the other party is refusing to perform his obligations.

Question 9

If the innocent party affirms the contract then the contract is not over and both parties should continue to perform their obligations. He can still claim ? for any loss he has suffered.

Answer 9

…damages.

Question 10

Usually, if a contract has been fully performed, it will not be possible to terminate. However, special rules apply to sale of goods contracts. If the seller breaches ss 9-11 of the Consumer Rights Act 2015 or s 13 or 14 of the Sale of Goods Act 1979, the buyer may usually..

Answer 10

..reject goods.

Even if the contract has been fully performed, ie the buyer has received the goods and paid for them, he may give them back and get his money back.

The buyer may lose the right to reject - eg under the Sale of Goods Act 1979 - if he has ‘accepted’ the goods (within the meaning of s 35 of the Act).

Question 11

The breach which gives the innocent party the right to terminate the contract (advance warning) may be what type of breach?

Answer 11

Anticipatory

Question 12

If one party does indicate that he is not going to perform the contract before the date due for performance to begin, then the other party can:

Answer 12

▪ terminate the contract and sue for damages immediately; or
▪ treat the contract as continuing and wait until the time fixed for performance in the hope that the party in breach will change his mind and perform the contract.

Question 13

Equitable remedies are discretionary. These are;

Answer 13

Specific performance

Injunctions

Question 14

Equitable remedies are only available if…

Answer 14

…damages are inadequate. For example, specific performance (SP) of a contract for the sale of something unique such as a house.

Question 15

Name 4 restrictions on specific performance?

Answer 15

• Not granted where an award of damages is an adequate remedy.
• Not granted where the court would have to supervise the parties over a period of time
• Specific performance will not usually be granted for contracts involving services or work.
• Specific performance will be granted only if it is just and equitable to do so.

Question 16

An injunction may be prohibitory (which forbids a person doing a particular act) or..

Answer 16

…mandatory.

A mandatory injunction requires a person to put right a breach of contract. A mandatory injunction is rare in practice.

Question 17

If the injunction will last for only a relatively short time (eg a few weeks), is it more or less likely to be granted?

Answer 17

More likely.

Question 18

If granting the injunction will have the effect of seriously affecting the party’s career it is *** to be granted.

Answer 18

Unlikely

Question 19

An injunction will not be granted if the court feels that the inevitable result would be to compel the party to work for the original employer. However, injunctions have been awarded to enforce

Answer 19

..negative covenants in employment contracts.

Question 20

The general idea behind a restitution remedy is to prevent one party..

Answer 20

…being unjustly enriched.

Question 21

If one party (the payer) has paid money to the other (the payee) under a contract, the payer can bring an action in restitution to recover the money if the payee is in breach and there has been a total….

Answer 21

…failure of consideration

Question 22

If the other party has done anything at all in performance of the contract the advance payment will *** recoverable in restitution (although it may be recoverable to an extent as part of a damages claim).

Answer 22

…not be recoverable.

Question 23

When would a ‘quantum meruit’, ie a reasonable sum for work done be awarded?

Answer 23

When one party has supplied goods or done work for the other and the other party is in breach of contract, the party supplying the goods/doing the work may be able to bring a claim in restitution for a reasonable sum for work done or goods supplied as an alternative to a claim for damages.

It may also be awarded if goods have been supplied or work has been done but a contract has not been formed, the supplier may be able to bring a claim in restitution for a reasonable sum for work done or goods supplied. (British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984])

Question 24

The doctrine of complete performance provides that performance of contractual obligations must be…

Answer 24

…precise and exact. Cutter v Powell (1795)

Question 25

If one party has to pay only after the other has performed his obligations under the contract, then if performance is not precise and exact, the payer does not have to…

Answer 25

..pay any part of the price (although he will not be able get back the money he has already paid unless there has been a complete failure of the consideration).

Question 26

What are the 4 exceptions to the doctrine of complete performance?

Answer 26

1. Wrongful prevention of performance by the other party.
2. Voluntary acceptance of partial performance by the other party - Sumpter v Hedges.
3. Substantial performance - Hoenig v Isaacs, cf Bolton v Mahadeva.
4. Divisible obligations.

Question 27

The party who was wrongfully prevented may claim..

Answer 27

..damages or a quantum meruit (a reasonable sum for work done) - Planché v Colburn

Question 28

Wrongful prevention applies if the contractor literally could not complete because the customer was not able, not giving them access, preventing them, actually preventing them from finishing. It is not available where..

Answer 28

…where the work to date is seriously defective.

Question 29

For the exception of voluntary acceptance of partial performance by the other party to apply, the
defendant must have…

Answer 29

…an option to take or not to take the benefit of the work done, ie there must be a free choice. Sumpter v Hedges [1898]

Question 30

Where there is voluntary acceptance of partial performance, the person who has done the work can claim…

Answer 30

…a quantum meruit from the other party, ie a reasonable amount for the work that has been done.

Question 31

For substantial performance to apply the work must be …

Answer 31

…‘finished’ but slightly defective.
Hoenig v Isaacs [1952] 2 All ER 176, CA,

Provided this condition is satisfied then it is necessary to consider the nature and extent of the defects. It may be useful to compare the contract price with the amount needed to rectify the defects.

The party substantially performing may claim full contract price less the amount needed to put right the slightly defective performance.

Question 32

If the work has been finished but the defects were extensive and could not be remedied by some slight amendment of the system, the defendant could not rely on the exception of…

Answer 32

..substantial performance.

In Bolton v Mahadeva [1972] 1 WLR 1009, CA the contractor had not substantially performed his contractual obligations. The heating system did not perform effectively the function which it was intended to perform.

Question 33

A party may be able to recover some money for work he has done, even though he has not performed his contractual obligations exactly, if the obligations within that contract are…

Answer 33

…divisible. eg if the parties have agreed payments for a distinct part or stage of the work. Each part or stage is treated like a separate contract.

• These are contracts where payment has been agreed for distinct parts/stages of the work. Each part is treated like a separate contract.
• Once one distinct part of the contract has been completed, then the party is entitled to be paid for that part.

Question 34

A contract may also be discharged by (2 things)…

Answer 34

agreement and frustration.

Question 35

The parties to a contract may agree to release one another from outstanding obligations, in which case the contract will come to an end.
The basic rule is that, in order to bind the parties, the agreement to end a contract (or to vary its terms) must itself …

Answer 35

…contain all the elements of a contract, so there must be offer, acceptance, consideration and contractual intention.