Remedies for Breach of Contract

11 Key excerpts on "Remedies for Breach of Contract"

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  Text, Cases and Materials on Contract Law

  • Richard Stone, James Devenney(Authors)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  Chapter contents 15.1 Introduction 682 15.2 Damages 682 15.3 Specific relief 797 Additional reading 804 Chapter 15 Remedies REMEDIES 682 | 15.1 Introduction In this chapter we shall be considering Remedies for Breach of Contract. In recent years there has been considerable debate about the meaning of the word ‘remedy’. Professor Birks famously argued that the word ‘remedy’ should be jettisoned from our legal dictionary because of its inherent ‘instability’ and its tendency to ‘impede’ the development of a classification of responses to private law actions (see, par-ticularly, Birks, P, ‘Rights, wrongs and remedies’ (2000) 20 OJLS 1, 3–4). This drastic course of action is probably not necessary. For example, Rafal Zakrzewski has provided us with a stable core meaning of remedy in his work Remedies Reclassified , 2005, Oxford: OUP. He suggests that we should ‘use the term “remedy” only in the sense of the rights arising from certain court orders or pronouncements’. We will consider the two main Remedies for Breach of Contract in this chapter – the award of damages and, more briefly, the order of specific relief. Following a breach of contract, the courts generally aim to award a remedy that puts the claimant ‘in a situation as beneficial to him as if the agreement were specifically performed’ ( Harnett v Yielding (1805) 2 Sch & Lef 549, 553). Usually an award of compensatory damages will be sufficient to achieve this purpose because the claimant, for example, can use the damages to purchase substitute performance from an alternative source. In some situations, however, substitute performance will be unavailable or will be insufficient to pro-tect the claimant’s interest in performance of the contract.

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  Contract Law For Dummies

  • Scott J. Burnham(Author)
  • 2011(Publication Date)
  • Wiley

    (Publisher)

  Part V Exploring Remedies for Breach of Contract

  In this part . . .

  This part deals with Remedies for Breach of Contract. The goal is to give the damaged party the expectancy — the financial equivalent of what the party reasonably expected to receive from the performance of the contract. Although that seems easy enough, the actual calculations sometimes become complex, and contract law places certain limitations on remedies according to the principles of causation, certainty, foreseeability, and mitigation.

  The chapters in this part explain how the courts generally calculate damages in the common law and the UCC and then examine different remedies, including unwinding the contract through rescission, reforming the contract, and settling the dispute via alternative dispute resolution (ADR).

  Passage contains an image

  Chapter 16 Examining How Courts Handle Breach of Contract In This Chapter

  Understanding the concept of contract remedies

  Applying the rule of the expectancy

  Looking at the ways courts may limit damages for breach

  Estimating reliance and restitution

  When a party fails to perform (do what he promised to do), resulting in breach of contract, the courts strive to exact justice by awarding the non-breaching party a remedy. Courts are vigilant to ensure that the non-breaching party is compensated, but not overcompensated, for the breach. Therefore, courts don’t award punitive damages for breach of contract, because punitive damages don’t compensate for a loss. Courts compensate the non-breaching party in three ways:

  Expectancy:

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  Construction Law and Management

  • Keith Pickavance(Author)
  • 2013(Publication Date)
  • Informa Law from Routledge

    (Publisher)

  CHAPTER 10 REMEDIES FOR BREACH Julian Critchlow INTRODUCTION

  Where one party breaches his legal obligations to another, the injured party may be entitled to any of a number of forms of relief. Often, the parties will agree their own remedies. As to the common law position, the entitlement to damages is prominent. Where the parties are in contract, termination, repudiation, or rescission may also be options. Sometimes, an injunction will be available. The obligation breached may have its foundation in contract, tort, or statutory duty. Even where no obligation has been breached, if one party performs services for another at his request, an entitlement to be paid a reasonable sum is likely to arise. This chapter considers each of the above while concentrating on damages for breach of contract.

  FINANCIAL REMEDIES AGREED BY THE PARTIES

  As a general rule, the parties to a contract may themselves determine the remedies applicable in case of breach. In construction contracts, the standard forms make express provision. Such remedies may include termination, which is discussed later. They may also include financial entitlements, such as the grant of an express right to the employer to obtain liquidated damages for late performance by the contractor, or a contractor’s right to recover loss and expense for employer default.

  Liquidated damages

  The overwhelming majority of standard form contracts and, indeed, bespoke contracts, entitle the employer to liquidated damages where the contractor fails to complete the contract works by the time stipulated. The contractor’s delays must be culpable, i.e. delays that are his responsibility and for which he is not entitled to an extension of time. Typically, damages will be expressed as an amount per day, although sometimes an amount per week is stated.

  The advantage of providing for liquidated damages is that they obviate the employer’s necessity to prove the actual losses he has suffered in the event of delay. Thus, the damages that will typically be incurred by a developer will include the costs associated with being unable to sell the development so that he is kept out of his money, and the additional cost of financing the works. Establishing quantum of such costs can be an uncertain process. A pre-agreed figure for liquidated damages can greatly reduce that uncertainty.

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  Business Law and the Regulation of Business

  • Richard Mann, Barry Roberts(Authors)
  • 2019(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  357 in Chapter 23, governs the sale of goods. Contract remedies are available to protect one or more of the following interests of the injured parties: 1. their expectation interest, which is their interest in having the benefit of their bargain by being put in a position as good as the one they would have been in had the contract been performed; 2. their reliance interest, which is their interest in being reimbursed for loss caused by reliance on the contract by being put in a position as good as the one they would have been in had the contract not been made; or 3. their restitution interest, which is their interest in having restored to them any benefit that they had con- ferred on the other party. C HAPTER 18 The traditional goal of the law of contract remedies has not been the compulsion of the promisor to perform his promise but compensation of the promisee for the loss resulting from breach. RESTATEMENT OF CONTRACTS CONTRACT REMEDIES W hen one party to a contract breaches the contract by failing to perform his contrac- tual duties, the law provides a remedy for the injured party. Although the primary objective of contract remedies is to compensate the injured party for the loss resulting from the breach, it is impossible for any remedy to equal the promised performance. The relief a court can give an injured party is what it regards as an equivalent of the promised performance. This chapter examines the most common remedies available for breach of contract: (1) monetary damages, (2) the equitable remedies of specific performance and injunction, and (3) restitution. Article 2 of the Uniform Commercial Code (UCC), which provides specialized remedies that we will discuss 1. Explain how compensatory damages and reliance damages are computed. 2. Define (a) nominal damages, (b) incidental damages, (c) consequential damages, (d) foreseeability of damages, (e) punitive damages, (f) liquidated damages, and (g) mitigation of damages.

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  Contract Law

  Principles and Context

  • Andrew Stewart, Warren Swain, Karen Fairweather(Authors)
  • 2019(Publication Date)
  • Cambridge University Press

    (Publisher)

  The transaction costs of bringing a claim also have to be considered. In fact, if contractual remedies are about protecting the perform- ance interest, then specific performance should be a better fit as a default remedy for breach of contract. Yet other remedies for breach have long been treated as of secondary importance to damages. As explained in Chapter 22, specific performance and injunctions will only be granted when damages cannot provide an adequate remedy. In practice, specific performance has a very marginal role in Australian contract law beyond the context of sales of land. A better view then is that, while remedies like specific performance do protect the performance interest, contract damages are more naturally thought of as compensatory. 3 The reason that damages are treated as the primary remedy for breach is historical. As explained in 1.10, damages were the remedy given in the medieval action of trespass, which developed into the contractual action of assumpsit. Assumpsit in turn morphed into the modern action for breach of contract in the nineteenth century. This arrangement reflects the division between claims in debt and claims in contract. Debt is based on an entitlement to a fixed sum, as discussed in 22.16–22.17. Contract is founded on a promised performance. A breach of contract amounts to a failure to do what was promised or agreed, and is a wrong causing a loss to be remedied by an award of damages. 23.02 A right to perform or pay damages? As early as 1897, the great American jurist Oliver Wendell Holmes Jr said that the duty to keep a contract meant no more than a prediction that damages would be payable if the contract was breached. 4 Building on this basic idea, modern law and economics scholars have promoted an instrumentalist view of contract damages. It is assumed that parties to a contract have a choice. They can either perform the contract, or pay damages.

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  Chinese Contract Law

  Civil and Common Law Perspectives

  • Larry A. DiMatteo, Chen Lei(Authors)
  • 2017(Publication Date)
  • Cambridge University Press

    (Publisher)

  part vi remedies and damages 15 Damages and Specific Performance in Chinese Contract Law Lei Chen 15 . 1 INTRODUCTION This chapter discusses contractual remedies in Chinese law from a compara- tive law perspective. Contracting parties are mainly concerned about the performance of contract terms, in anticipation of obtaining benefits from due performance by the other party. Lawyers, on the other hand, will fre- quently encounter issues relating to breach of contract and the remedies for such breaches. The function of contractual remedies is to place a promisee, who has suffered the consequences of a contractual breach, in as good a position as he would be in if the promisor had performed, or to “make the victim of a breach whole”. 1 Without appropriate remedies, a contract would have little value as a binding agreement between parties. 2 This “performance interest” is the very basis for a contract between parties. Therefore, it is no exaggeration to say that the essence of a contract lies in its performance. 3 In turn, the essence of performance lies in the enforcement of remedies. In order to achieve this goal, there are two major types of remedies available: the first requires the defaulting party to pay monetary compensation, either to enable the non-defaulting party to purchase a substitute performance, or to compen- sate for the profits that the promised performance would otherwise have 1 S. Shavell, “Specific Performance versus Damages for Breach of Contract: An Economic Analysis” (2005–06) 84 Tex.

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  Using Commercial Contracts

  A Practical Guide for Engineers and Project Managers

  • David Wright(Author)
  • 2016(Publication Date)
  • Wiley

    (Publisher)

  If a contractor agrees to supply a thousand cast-iron widgets to a customer, it will be a breach if he then categorically refuses to manufacture or deliver them at all. It is also breach if he only delivers 990. It is breach if they are delivered several months late or two days late. It is breach if the quality of all or only two widgets is below that required by the contract. It is also breach if the widgets are not cast-iron, but 18-carat gold or platinum.

  17.4 Remedies

  Remedies fall into two basic types – self-help remedies and remedies that are available through the courts. The self-help remedies include –

  • the right to terminate the contract for breach of condition or serious breach of an innominate term;
  • (including the right of a buyer to reject or refuse to pay for goods that do not comply with the contract); and
  • the power/right of an unpaid contractor or seller in certain circumstances to exercise a lien or retain possession of the goods, and ultimately to re-sell them if the buyer is clearly unable or unwilling to pay for them.

  The remedies available through the courts are: claims for damages for various kinds of breach, an action by the seller for payment of the price of goods supplied, claims for the equitable remedies of rescission and injunction and orders for specific performance.

  17.5 Termination for breach of condition or innominate term, or repudiation

  Termination is a right, not a duty. It is not possible for either party to force the other side to terminate a contract by his own breach or refusal to comply with its terms. The injured party always has the right not to terminate but to keep the contract alive in the hope or expectation that he will still receive some level of performance that will make the exercise worthwhile.

  Termination is any communication or act by the injured party that tells the party in breach that the injured party has terminated the contract. Usually it will be by verbal or written notice by the injured party that the contract has been terminated, but other acts can also be notice, such as rejecting goods or withdrawing from or barring the other party from access to the place where work is being carried out. It is of course always advisable to give the party in breach notification in writing, or verbal notification later confirmed in writing, that the contract has been terminated. First, this will ensure that the actions of the injured party cannot be misinterpreted or claimed to be a breach of the contract in their turn. Second, it will fix the date or time of termination so that there can be no doubt later.

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  From Promise to Contract

  Towards a Liberal Theory of Contract

  • Dori Kimel(Author)
  • 2003(Publication Date)
  • Hart Publishing

    (Publisher)

  As we shall see, this notion itself has been the subject of some controversy. The Standard Remedy and the Theory of the Practice Having used the term core contractual obligation (or, similarly, core contrac-tual right), I mentioned an apparent discord, in contract law, between it and remedial rights. (From hereon I will sometimes omit the separate reference to duties, though my subsequent comments should be equally applicable to both.) But Remedies for Breach of Contract come in numerous shapes and forms. Is there scope for speaking of the core remedial right (or, similarly, the core 1 ‘The Performance Interest in Contract Damages’ (1995) 111 Law Quarterly Review 628, at 629. remedial duty)? Is there a point in asking what is, or what should be, the stand-ard remedial response to a breach? I think there is. It is true that the great diversity of types of contract and con-tractual relations, and the greater diversity still of circumstances in which con-tractual disputes arise, mean that whatever the answers might be, there are bound to be numerous cases where the standard remedy would prove to be under- or over-compensatory, impractical, or otherwise unfair or inappropri-ate. Nevertheless, such questions can, and should, be asked. Answering them may be understood as an attempt to determine what is (or what should be) the general rule and what should count as a justification-requiring deviation from it, allowing that instances where deviations from the rule could be justified may be many. But there is no reason to assume in advance that no grounds for a gen-eral rule could be found. Moreover, a grasp of the rule and its justification may well prove conducive to understanding what kind of considerations could just-ify deviating from it. Contrary to the popular saying, exceptions cannot prove the rule; at best they can prove that the rule has exceptions.

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  Contract Law

  Cases and Materials

  • Kenneth Yin, Simon Kozlina, Kelly Green, Luca Siliquini-Cinelli, Emmanuel Laryea, Lisa Spagnolo(Authors)
  • 2020(Publication Date)
  • Cambridge University Press

    (Publisher)

  PART VII REMEDIES 721 VII 22 ENFORCING A CONTRACT 723 22.1 Overview ‘Enforcing’ a contract encompasses specific performance, injunctions, debt, and the recovery of liquidated damage, each being remedies the innocent party seeks under the contract by way of its enforcement. The idea of enforcing a contract is thus to be distinguished from damages for breach of contract, which is compensation for the consequences of non-performance. Enforcing a contract Specific performance Injunctions Debt Liquidated damages, penalties 22.2 Specific performance Concept Short explanation Relevant authorities Principles text* Inadequacy of damages Specific performance will not normally be ordered if damages are an adequate remedy. Because of the unique qualities of land, the purchase of land is usually regarded as appropriate for specific performance. On the other hand, the purchase of chattels is not generally regarded as appropriate for specific performance, because damages would ordinarily compensate the innocent party for their loss, unless those chattels were unique Wight v Haberdan Pty Ltd [1984] 2 NSWLR 280 Adderley v Dixon (1824) 1 Sim & St 607; 57 ER 239 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 Loan Investment Corporation of Australasia v Bonner [1970] NZLR 724 Semelhago v Paramadevan [1996] 2 SCR 415 Dougan v Ley (1945) 71 CLR 142 Chapter 22: 22.02–22.03 Impossibility and futility Specific performance will not be ordered when it is impossible or futile Wenham v Ella (1972) 127 CLR 454 Verrall v Great Yarmouth Borough Council [1981] QB 202 Chapter 22: 22.04 The problem of constant supervision Specific performance will not normally be ordered where constant supervision is required—noting the qualifications in Patrick Stevedores J C Williamson Ltd v Lukey (1931) 45 CLR 282 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 Chapter 22: 22.05 VII 724 PART VII: REMEDIES

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  Remedies in Australian Private Law

  • Katy Barnett, Sirko Harder(Authors)
  • 2018(Publication Date)
  • Cambridge University Press

    (Publisher)

  See McKendrick, ibid. 18 GH Treitel, Remedies for Breach of Contract: A Comparative Account (OUP 1988) 53. 19 Ibid, 71; K Zweigert and H Kötz, Introduction to Comparative Law (T Weir tr, 3rd edn, OUP 1998) 484. 20 Treitel, ibid, 53. 21 S Rowan, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (OUP 2012). 22 See [11.12]. 23 J O’Sullivan, ‘Specific Performance’ in J McGhee (ed), Snell’s Equity (33rd edn, Sweet & Maxwell 2015) [17–005]. 3 294 PART 3: COMPELLING PERFORMANCE AND RELATED REMEDIES stipulated by the contract), but many injunctions are prohibitive (simply ordering the defend- ant not to do something), so they are more readily awarded because they are less intrusive. 24 [10:12] It is sometimes said that specific performance is awarded to compel performance of all outstanding obligations under a contract, but it has been observed that this is only the case in relation to executory contracts (where the court is awarding specific performance in the ‘limited’ or ‘true’ sense). 25 Specific performance begins to look increasingly like a form of mandatory injunction if the distinction between ‘limited’ and ‘broad’ specific performance is not maintained. Indeed, contractual rights may often be enforced by a mandatory injunction rather than specific performance. 26 [10:13] An injunction is more likely to be sought to restrain breaches of specific clauses of a contract as well as to restrain torts, equitable wrongs, and statutory wrongs. Specific perform- ance may be given for threatened breach of contract in exceptional circumstances, 27 and, similarly, injunctions can be awarded to restrain future or threatened breaches of obligations. [10:14] Importantly, injunctions are sometimes granted where specific performance would not be granted – namely, to restrain the breach of a negative covenant (a contractual undertaking not to do something).

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  The German Law of Contract

  A Comparative Treatise

  • Basil S Markesinis, Hannes Unberath, Angus C Johnston(Authors)
  • 2006(Publication Date)
  • Hart Publishing

    (Publisher)

  (a) Preliminary Observations The idea of specific enforcement of an obligation is much narrower in the common law than in the civil law. In accordance with its equitable origins, the remedy is dis- cretionary in nature. Its enforcement presupposes a court decree, which is directed at the defendant personally. The use of specific performance has traditionally not been regarded as generally desirable because it places a strain on the machinery of law and interferes with the personal freedom of the contractual debtor (or defendant). In English law, the remedy has thus been confined to exceptional cases in which an award of damages would not afford sufficient protection to the contractual creditor 392 BREACH OF CONTRACT: GENERAL PRINCIPLES (or claimant): in the classic terminology, where damages are not an ‘adequate’ rem- edy. (See the various references in the bibliography above, particularly: Snell’s Equity, chapter 15; Jones and Goodhart, Specific Performance; see also, Treitel, The Law of Contract, p 1019 ff; McKendrick, Contract Law, chapter 26; and as to the law in the US, Dobbs, Law of Remedies (2nd edn, 1993), § 12.8.) Where it concerns an obligation to forbear from doing something, the order is known as a prohibitory injunction. An important exception to the rule that the obligation of performance is not enforced in specie arises in relation to an obligation to pay a certain amount of money, which even the common law (as opposed to equity) was prepared to enforce. Here, an action ‘for an agreed sum’ is available that is neither a suit for specific performance nor damages. In providing a basis from which to make a comparative assessment of the German law on enforced performance, it is necessary to consider an outline of the English law of specific performance.

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