Week 8 Everything Flashcards
Remedies
If one party breaches a term of the contract, a statutory term or in some cases a non-contractual representation or promise and they are not protected from liability by an effective disclaimer, there are a number of possible legal remedies available to the other party.
If one party breaches a term of the contract, a statutory term or in some cases a non-contractual representation or promise and they are not protected from liability by an effective disclaimer, there are a number of possible legal remedies available to the other party.
Rescission
Damages
Equitable remedies
Statutory remedies
Rescission
Rescission is an order of the court declaring a contract to be terminated or unenforceable. The court will as far as possible seek to restore the parties to their original positions.
Rescission is an order of the court declaring a contract to be terminated or unenforceable in the event of:
Complete non-performance
Breach of a condition
Misrepresentation
Duress, undue influence
Unconscionability
Rescission
Whether or not the other party is entitled to rescind the contract will depend upon:
Whether there has been a complete failure to perform or a partial performance, and whether the partial performance involves breach of a condition or of a warranty.
Rescission
A party will completely fail to perform if:
they make no effort to perform their contractual obligations
their actual performance is completely different from what they were required to do under the contract [fundamental breach]
prior to the time for performance they clearly indicate that they will not be performing their obligations (anticipatory breach).
A party will partially perform the contract if
A party will partially perform the contract if they comply with some of the terms of the contract but breach one or more of the other terms.
Damages
If there is a breach of a single term of the contract, whether the other party is entitled to terminate the contract will depend upon whether the term breached was a condition or a warranty
condition
A condition is a term of the contract of fundamental importance, a breach of which leads to rescission and damages for breach of contract.
Associated Newspapers v Bancks
warranty
A warranty is a term of lesser importance than a condition, a breach of which leads to damages only.
Bettini v Gye
The other party will be entitled to damages in the event of:
any breach of contract - whether total or partial, actual or anticipatory, condition or warranty, breach of a collateral contract, or misrepresentation.
The objective of the court in making an award of damages
The objective of the court in making an award of damages is to restore the other party to the position they would have been in if the breach or misrepresentation had not occurred - that is, if the contract has been performed properly.
To claim damages, the plaintiff must come under one of the two branches of the rule in Hadley v Baxendale 156 ER 145
The first branch deals with damages which are the natural result of the breach (ordinary damages)
The second branch deals with damages which should be in the contemplation of the parties as being the probable result of the breach (extraordinary damages).
If the plaintiff does not comply with either branch, damages will not be awarded.
The plaintiff is under an obligation to mitigate the loss – that is, to keep the loss down to a minimum.
If this is not done, the court will see the loss as inflated and that part of the damages which is inflated, will not be granted by the court.
Brace v Calder [1895] 2 QB 253
Equitable remedies
If the plaintiff can demonstrate to the court that an award of damages is not a satisfactory remedy, the court may decide to provide an equitable remedy, such as: Specific performance, or Injunction.