Week 10: Breach of Contract Remedies and Termination

Question 1

What are three instances which may constitute a breach of contract?

Answer 1

1. Non-performance
2. Defective performance
3. Late performance

Question 2

What is the term for when a party communicates that there will be a failure to meet the terms of the contract?

Answer 2

Anticipatory breach.

Question 3

What are the three instances of justified breaches of contract?

Answer 3

1. Other party in breach
2. Non-cooperation of the party
3. Impossibility

Question 4

What is meant by mutuality in reference to breaches of contract?

Answer 4

Just because of a failure by one party to meet the terms of the contract, that doesn’t entitle the other party to fail to meet the terms of the contract. Both parties must fulfil their obligations.

Question 5

What is meant by materiality in reference to breaches of contract ?

Answer 5

If a breach does not go to the root of the contract, this will not allow the other party to rescind their performance.

Question 6

Which case highlights materiality?

Answer 6

Wade v Walton

Facts:
o Wade was a comedian
o Walton Glasgow pavilion employed Wade to perform
o A term of the contract was that artists had to provide a bill 14 days before performance
o This term was not met
o Walton refused to allow Wade to perform

Judgement:
o It was argued that the breach wasn’t severe enough to constitute a rescind

Question 7

What are the three options available to the wronged party should the other party repudiate their obligations?

Answer 7

o Rescind and sue for damages
o Wait until time for performance and then sue for damages
o Perform and sue for contract price

Question 8

What is the term for when a court orders performance?

Answer 8

Specific implement.

Question 9

Which case highlights specific implement?

Answer 9

AMA (New Town) v Law

Question 10

What is the term to describe a party’s refusal to carry out future obligations due to their counterparts breach of contract?

Answer 10

Recission

Question 11

What are the two self help remedies available as a means of enforcement in the event of a breach?

Answer 11

1. Retention (Performance)
2. Lien (Retaining possession)

Question 12

What are the five judicial remedies available as a means of enforcement in the event of a breach?

Answer 12

1. Declarator
2. Action for payment
3. Specific implement
4. Interdict
5. Damages

Question 13

What is the distinction between an action for payment and damages?

Answer 13

Damages may also allow for inconvenience or emotional harm.

Question 14

What is the term for damages additional to that which would contitute restitutio in integrum e.g. emotional harm, inconvenience etc.

Answer 14

Solatium.

Question 15

Which case highlights solatium?

Answer 15

Diesen v Samson

Question 16

What are the two limiting principles of damages?

Answer 16

1. Causation
2. Remoteness

Question 17

Which case highlights remoteness in reference to damages?

Answer 17

Hadley v Baxendale

Question 18

What was the two pronged test outlined in Hadley v Baxendale to determine the remoteness of damages.

Answer 18

Rule 1: Did they have reasonable contemption that the breaches may occur
Rule 2: In some cases there may be an idea of separateness - additionally there are special damages would be claimed

Question 19

What are the two lawful methods of terminating a contract?

Answer 19

1. Performance
2. By agreement

Question 20

What are the 4 other methods of termination?

Answer 20

1. Confusuion
2. Compensation
3. Prescription
4. Frustration

Question 21

What is the principle of confusion.

Answer 21

You cannot be both a debtor and a creditor.

Question 22

What is the principle of compensation?

Answer 22

When two parties owe each other obligations.

Question 23

What is the principle of prescription?

Answer 23

Proceedings must be brought within a reasonable time following failure to perform.

Question 24

What is the term to describe when there becomes a new debtor?

Answer 24

Delegation.

Question 25

What is the term to describe when there is a new replacement contract ?

Answer 25

Novation.

Question 26

What is the principle of frustration.

Answer 26

When a radical change of circumstances makes completion of the contract impossible.