Remedies for Breach of Contract

Topics: Contract, Breach of contract, Contract law Pages: 10 (2888 words) Published: September 22, 2012
Chapter 18: Remedies for Breach of Contract
Election to discharge: self-help remedy
Types of Judicial Remedies
Common law remedy of damages
Common law remedy of an action for a fixed sum
Equitable remedy of specific performance
Equitable remedy of injunction
Limitation Act
Judicial remedies may be barred by lapse of time due to LA •S 6 LA: no action against breach of contract after 6 years have passed (unless party unaware of breach) •LA does not apply to any legal action rooted purely in unjust enrichment oManagement Corporation Strata Title No 473 v De Beers Jewellery Pte Ltd (2002) Equitable doctrine of laches

Preserved by s 32 of LA.
Remedies for specific performance and injunction
Applicant who delay in applying turned away when delay is inordinate and inexcusable: make application as soon as the nature of case permits •Consider the length of delay and whether the defendant acquiesced in the delay Contract Damages at Common Law: Compensation

Contractual damages: sum of money for any pecuniary losses incurred due to breach •Compensation only
oDamages are compensatory in nature
oCommon law does not traditionally award punitive damages in cases of breach unlike for tort Addis v Gramophone Company Ltd (1909)
oException: Whiten v Pilot Insurance Co (2002): Pilot tried to have a cynical ploy to force Mrs Whiten to settle claim for lower sum Pilot had to pay not only C$30,000 (insurance terms) but also C$1 million – punitive damages in denunciation of Pilot’s exceptionally reprehensible behaviour.  

Liquidated versus Unliquidated damages
opre-agreed value is a genuine pre-estimate of the loss which could be suffered as a result of breach •Unliquidated
oAwarded when penalty clause is aimed at “punishing” the party in breach – court awards unliquidated damages oSometimes the unliquidated damages – more than what penalty clause was set to have Public Works Commissioner v Hills (1906)

Guidelines from Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor Company, Limited (1915) oFind out if it is a penalty or liquidated damages
oPenalty – payment of money stipulated in terrorem (to force party to comply) oLiquidated damage: a genuine covenanted pre-estimate of damage oQuestion is of construction: judged at time of making contract not during breach Penalty if sum is extravagant and unconscionable in amount in comparison with greatest loss that could conceivably be proved Penalty if breach consists only in not paying a sum of money & sum stipulated is greater than sum which ought to have been paid Penalty if a single lump sum is made payable by way of compensation on occurrence of one or more or all of several events some causing serious damage while others causing trifling damage When making pre-estimation is almost impossible – situation where pre-estimated damage was true bargain Quantification and Measurement of Unliquidated Damages

1.Quantification by reference to “expectation”, “reliance” or other losses a.Expectation loss
i.Net profit that innocent party expects to make on basis that the contract is performed ii.Gross expectation loss: original sum without deducting the money needed to earn the sum of money b.Reliance loss

i.In reliance on other party performing his obligations, innocent party incurred other expenditure due to relying on the promise by the other party c.Other losses
1.The sum of money paid to another party in another contract due to the first contract being breached ii.Consequential loss
iii.Incidental loss
2.Placing the innocent party in the position as if contract was fully performed a.Generally: court will quantify unliquidated damages so as to place the aggrieved party as far as money can do to the position where they would have been had the contract been fully performed i.Robinson v Harman (1848)

3.Electing between different methods of quantifying loss
a.Expectation or...
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