Various remedies exist in contract law. These include:
Damages in contract law are a legal remedy available for breach of contract. Damages are an award of money to compensate the innocent party. The primary purpose of damages in contract law is to place the injured party in the position they would have been in had the contract been performed.
Parties to a contract may legitimately agree the amount of damages to be paid in the event of a breach and provide for this in their contract terms. This provides certainty to each party so that they know exactly what they are liable to pay should they be unable to perform their obligations. Such a clause will be enforceable by the courts only in so far as it is a genuine pre-estimate of loss. If it is a genuine pre-estimate it is known as a liquidated damages clause. If however, the amount specified in the contract is not a genuine pre-estimate but is aimed at deterring a breach of contract or punishing the party in breach, this is known as a penalty clause which is not enforceable.
Specific performance is an equitable remedy available at the discretion of the judge. It is an order by the court requiring one party to perform their contractual obligation. Whilst it is often said that contracts are made to be performed and parties should be held to their contractual obligations, the courts are often reluctant to order a party to unwillingly perform the contract and specific performance is only available in limited circumstances. In considering whether to grant specific performance the courts look to whether damages would be an adequate remedy, the type of contract and whether equity requires such an order.
1. Where damages are an inadequate remedy:
If the claimant could adequately be compensated by an award of damages for the breach of contract, the courts are unlikely to order specific