Describe The Remedies Available For Breach of Contract

When signing a contract not only are you agreeing to the terms of this contract you are agreeing to the consequences if breach the contract. There are many remedies available if one of the party’s breaches the contract and if the party who breached the contract doesn’t agree to the consequences then the matter will be taken to court. A breach of contract can be defined as a party failing to perform, precisely and exactly, his obligations under the contract.

However a party can only treat the contract as discharged in three situations:

Renunciation

Renunciation is where a party refuses to perform his obligations under the contract.

Breach of Condition

The second breach occurs where the party has committed a breach of condition.

Fundamental Breach

The third breach is where the party in breach has committed a serious breach of a term in the contract or totally fails to perform the contract. In most cases a breach of contract will result in damages being paid.

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The point of damages is to put the injured party in the same financial position he would have been in had the contract been properly performed. Damages are not always a suitable remedy so sometimes other remedies are put into place e.g. Injunction.

Damages

In order for the innocent party to actually get awarded damages they must be able to prove they suffered a loss from the contract not being fulfilled properly. The court has to think about two things when deciding to award someone damages and they are:

Remoteness

For what consequences of the breach is the defendant legally responsible? -The measure of damages
The principles upon which the loss or damage is evaluated or quantified in monetary terms.

This can only be determined after the first. If paying damages isn’t sufficient enough then obviously they have to look at other remedies, which include:

• Specific Performance
• Injunction

Specific Performance

Specific performance is where the court orders a positive contractual obligation. There are many circumstances where specific performance is not available:

• Damages provide an adequate remedy.
• Where the order could cause undue hardship.
• Where the contract is of such a nature that constant supervision by the court would be required.
• Where an order of specific performance would be possible against one party to the contract, but not the other.
• Where the party seeking the order has acted unfairly or unconscionably. He is barred by the maxim ‘He who comes to Equity must come with clean hands’.
• Where the order is not sought promptly the claimant will be barred by the maxims ‘Delay defeats the Equities’ and ‘Equity assists the vigilant but not the indolent’.  In general the court will only grant specific performance where it would be just and equitable to do so.

Injunction

An injunction is an order of the court requiring a person to perform a negative obligation. Injunctions fall into two broad categories:

Prohibitory injunction, which is an order that something must not be done.

Mandatory injunction, which is an order that something must be done, for example to pull down a wall which has been erected in breach of contract. Like specific performance it is an equitable remedy and the court exercises its discretion according to the same principles as with specific performance,