Remedies - Contracts Act 1950

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REMEDIES
• method by which an injured party enforces a right or corrects a loss. It will depend on the nature of breach and the result will be differ between parties.

The remedies available for breach of contract are:

1) RESCISSION

• An equitable remedy available at the discretion of the judge. It is available where a contract is voidable as a result of a vitiating factor such as misrepresentation, undue influence or duress. It will not cover damages.

Car &Universal Credit v Cadwell
Norris had paid £10 cash deposit and left another car as security and gave a cheque for £965 to Cadwell for Jaguar car purchased. The next day, Caldwell went to cash the cheque and discovered it was fraudulent and the car left as deposit turned out to be stolen. The court held that Mr Caldwell had successfully rescinded the contract. He had taken all steps possible to demonstrate that he no longer wished to be bound by the contract. He should not be prejudiced by the fact that his endeavours failed to locate Norris.

2) RESTITUTION

• It is not contractual and does not rely on plaintiff damages (quasi-contract). One party knowingly has received a benefit to which party is not entitled. An arrangement imposed by judge to rectify an occurrence of unjust enrichment.

Sinclair v Brougham
The society became insolvent, and the question arose how to divide up assets. By the time of the action, the only live issue was between some of the "B" shareholders and the depositors in the bank, the position of the "A" shareholders and trade creditors having been settled by agreement. The court held that the bank’s actions had been ultra vires and void, and that there was no possibility for the depositors to recover under quasi-contract.

3) DAMAGES

• It is a legal remedy available for breach of contract. Damages are an award of money to compensate the innocent party. The primary purpose of damages is to place the injured party in the position they would have been in had the contract been performed.

• Types of Damages: There are basically four broad categories of damages: ➢ Compensatory (to cover direct losses and costs).
➢ Consequential (to cover indirect and foreseeable losses). ➢ Punitive (to punish and deter wrongdoing).
➢ Nominal (to recognize wrongdoing when no monetary loss is shown)

• An award of damages is subject to the application of the rules on causation, remoteness and a duty to mitigate loss.

• Provision : Section 74 & 75 CA

Heng Hang Khim v Sineo Enterprise Sdn Bhd
The court held that where the defendant failed to deliver vacant possession of a condo unit before the 36-month period as stipulated in the S&P agreement. The plaintiff was entitled to a refund of the sum paid which was compensation for loss & damage caused by breach of contract.

Selva Kumar a/l Murugiah v Thiagarajah a/l Retnasamy
The court held that there is no distinction between liquidated damage and penalties. In view of section 75 which provides that in every case the court must determine what is the reasonable compensation. Any failure to prove the damages will result in refusal to award such damages.

• Remoteness
A claimant may only recover losses which may reasonably be considered as arising naturally from the breach or those which may reasonably be supposed to be in the contemplation of the parties at the time the contract was made.

Hadley v Baxendale
Due to neglect of the Defendant, the crankshaft was returned 7 days late to the plaintiff. The plaintiff unable to use the mill during this time and claimed for loss of profit. The Defendant argued that he was unaware that the mill would have to be closed during the delay and therefore the loss of profit was too remote. The court held that Hadley would have been entitled to recover lost profits from the five extra days the mill was inoperable. However, the rule should be that the damages were those fairly...
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