This document provides an overview of common law and equitable remedies for breach of contract, as well as defenses against such remedies. It discusses the development of common law and equity systems, equitable maxims, available remedies under each system including damages calculations, discharge of contracts, lawful excuses, and statutory rules regarding exemption clauses. Liquidated damages and injunctions are also covered as remedies, along with factors considered in damages assessments such as foreseeability and mitigation of loss.
Засідання Комітету АПУ з питань телекомунікацій, інформаційних технологій та Інтернету і комітету IT-права Lviv IT Cluster «Особливості укладення зовнішньо-економічних договорів у сегменті ІТ», 14 травня 2016 року, м. Львів
If the Force Majeure Clause is properly written, with the help of a risk management specialist, then your contracts will be more robust.
Is something happens and one of the party invokes Force Majeure, then there will be less discussions, less chances to enter into litigation, and the situation will be resolved faster and cheaper.
Frustration of contracts in emerging markets
Emerging markets hold opportunities but carry greater risk
Political change
Civil unrest/instability
Supply chain/contractor issues
Sanctions
Immature/unreliable legal system
How does contract law deal with these issues?
Doctrine of frustration
Force majeure clauses
How can you minimise these risks at the contract drafting stage?
Investment structuring
Drafting of contractual provisions
Засідання Комітету АПУ з питань телекомунікацій, інформаційних технологій та Інтернету і комітету IT-права Lviv IT Cluster «Особливості укладення зовнішньо-економічних договорів у сегменті ІТ», 14 травня 2016 року, м. Львів
If the Force Majeure Clause is properly written, with the help of a risk management specialist, then your contracts will be more robust.
Is something happens and one of the party invokes Force Majeure, then there will be less discussions, less chances to enter into litigation, and the situation will be resolved faster and cheaper.
Frustration of contracts in emerging markets
Emerging markets hold opportunities but carry greater risk
Political change
Civil unrest/instability
Supply chain/contractor issues
Sanctions
Immature/unreliable legal system
How does contract law deal with these issues?
Doctrine of frustration
Force majeure clauses
How can you minimise these risks at the contract drafting stage?
Investment structuring
Drafting of contractual provisions
Wendi Dodson Houston - While Procurement and contract managers are not expected to be legal experts, it is very difficult to manage a contract well without a basic understanding of the elements to a contract and the meaning of significant terms.
Comparison between Judicial Process vs Arbitration vs MediationJharna Jagtiani
Alternative dispute resolution (ADR; known in some countries, such as India,as external dispute resolution) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party.
A comparative table - Judicial Process v/s Arbitration v/s Mediation.
Wendi Dodson Houston - While Procurement and contract managers are not expected to be legal experts, it is very difficult to manage a contract well without a basic understanding of the elements to a contract and the meaning of significant terms.
Comparison between Judicial Process vs Arbitration vs MediationJharna Jagtiani
Alternative dispute resolution (ADR; known in some countries, such as India,as external dispute resolution) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party.
A comparative table - Judicial Process v/s Arbitration v/s Mediation.
Knock your DIY acquisition out of the park! Learn the tip and tricks to making your P2P event program successful in every aspect. Co-hosted by Canadian Cancer Society!
RemediesA valid agreement has been made, the promisor’s duties h.docxsodhi3
Remedies
A valid agreement has been made, the promisor’s duties have not been discharged; he or she has breached the contract. When one party has failed to perform, what are the rights of the parties? Or when the contract has been avoided because of incapacity or misrepresentation and the like, what are the rights of the parties after disaffirmance? These questions form the focus of this chapter.
A. Theory of Contract Remedies
Purpose of Remedies
The fundamental purpose of remedies in noncriminal cases is not to punish the breaching party but—if possible—to put the nonbreaching party in the position he or she would have been in had there been no breach. There are two general categories of remedies—legal and equitable. In the category of legal remedies are damages. Damages are money paid by one party to another; there are several types of damages.
In the category of equitable remedies are these three: specific performance, which means a person is ordered to deliver a unique thing (land or a unique personal property, such as a painting or an antique car); injunction, a judicial order directing a person to stop doing what he or she should not do (such as competing with a former employer in violation of a noncompete agreement); and restitution, which means putting the parties back into the position they were in before the contract was made.
Parties Have the Power—but Not the Right—to Breach
In view of the importance given to the intention of the parties in forming and interpreting contracts, it may seem surprising that the remedy for every breach is not a judicial order that the obligor carry out his or her undertakings. A damage remedy to compensate the maker for out-of-pocket loss or lost profits is sensible; a judicial decree forcing the computer manufacturer to pay for and take delivery of the boards would be wasteful. In general and if possible, the fundamental purpose of contract remedies is to put the nonbreaching party in the position it would have been in had there been no breach.
B. Promisee’s Interests Protected by Contract
Contract remedies serve to protect three different interests: an expectation interest, a reliance interest, and a restitution interest. A promisee will have one of these and may have two or all three. An expectation interest is the benefit for which the promisee bargained, and the remedy is to put him in a position as good as that which he would have been in had the contract been performed. A reliance interest is the loss suffered by relying on the contract and taking actions consistent with the expectation that the other party will abide by it; the remedy is reimbursement that restores the promisee to his position before the contract was made. A restitution interest is that which restores to the promisee any benefit he conferred on the promisor.
C. Legal Remedies: Damages
The promisee, whom we will hereafter refer to as the nonbreaching party, has the right to damages (a money award), if that is required to make h ...
Discharge of ObligationsA. Discharge of Contract DutiesA perso.docxlynettearnold46882
Discharge of Obligations
A. Discharge of Contract Duties
A person is liable to perform agreed-to contract duties until or unless he or she is discharged. If the person fails to perform without being discharged, liability for damages arises. Here we deal with the second-to-the-last of the four broad themes of contract law: how contract duties are discharged.
Discharge by Performance (or Nonperformance) of the Duty
A contract can be discharged by complete performance or material nonperformance of the contractual duty. There is in every contract “an implied covenant of good faith” (honesty in fact in the transaction) that the parties will deal fairly, keep their promises, and not frustrate the other party’s reasonable expectations of what was given and what received.
Full Performance
Applies to the promises to answer personally for a duty of the deceased person made by the executor of the will, or by the administrator of the estate if there is no will.
Nonperformance, Material Breach
Under UCC Section 2-106(4), a party that ends a contract breached by the other party is said to have effected a cancellation. The cancelling party retains the right to seek a remedy for breach of the whole contract or any unperformed obligation. The UCC distinguishes cancellation from termination, which occurs when either party exercises a lawful right to end the contract other than for breach.
Substantial Performance
Logically, anything less than full performance, even a slight deviation from what is owed, is sufficient to prevent the duty from being discharged and can amount to a breach of contract. But under modern theories, an ameliorative doctrine has developed, called substantial performance: if one side has substantially, but not completely, performed, so that the other side has received a benefit, the nonbreaching party owes something for the value received.
Substantial Performance
The doctrine of substantial performance recognizes that the contractor has not completed construction, and therefore is in breach of the contract. Under the doctrine, however, the owner cannot use the contractor’s failure to complete the work as an excuse for non-payment. “By reason of this rule a contractor who has in good faith substantially performed a building contract is permitted to sue under the contract, substantial performance being regarded as full performance, so far as a condition precedent to a right to recover thereunder is concerned.”
Anticipatory Breach and Demand for Reasonable Assurances
When a promisor announces before the time his performance is due that he will not perform, he is said to have committed an anticipatory breach (or repudiation). Another type of anticipatory breach consists of any voluntary act by a party that destroys, or seriously impairs, that party’s ability to perform the promise made to the other side. These same general rules prevail for contracts for the sale of goods under UCC Section 2-610.
Related to the concept of anticipat.
PRC Contract Law Principles and Risk Management in Contract DraftingRHKLegal
An overview of contract drafting techniques with regard to the PRC Contract Law principles and recent Supreme Court Directions. An analysis of limitation of liability and liquidated damages clauses in the China market context.
Risk of employment relationship recognized by Ukrainian regulator(s) where individual subcontractors engaged by IT company. May Diia City be treated as mitigation strategy?
Module 5 contract requirement to respect "industry standards"Natalia Perestyuk
Неявные условия договора с заказчиком на разработку ПО: соблюдение "передовых стандартов индустрии", выполнение работы "до окончательного удовлетворения закзчика", ссылка на "vision" продукта, “в должном объёме и должным образом”
Module 4 On going service consumption vs deliverables expectationsNatalia Perestyuk
ИТ-аутсорсинг: сервис с ответственностью за процесс работы команды (team leasing) или за поставленные наработки (deliverables) с успешным приёмочным тестированием
Recommendations on Ukraine’s Accession to Hague Trust Convention (1985)Natalia Perestyuk
“the first serious attempt in 600 years to bridge the gap of the “English Channel” (known in French as La Manche) in the field of fiduciary law" D.W.M.Waters, 1995
Оплата за процесс или за результат, в чём отличие заказа на строительство/разработку от услуги на доступ к экспертизе/ресурсу, аутсорсинг и аутстаффинг, разработчики софта и системные интеграторы, передача прав интеллектуальной собственности или лицензия, само собой разумеющееся глазами юриста и программиста, какими сюрпризами чрезаты договоренности по "общему праву", уязвимые места ожиданий американских заказчиков в части авторства и доработок и как их учесть не в ущерб интересам друг друга
1. Contracts & Common Law:
Breach Remedies & Claims Defence
prepared by Natalia Perestyuk to be presented on May-14’16
Managing Partner at Network Partners
Attorney at Law, MBA
2. Common Law & Equity
Common law – body of law developed through court judgement
Common law - system of “rigid rules laid down by royal courts
following the Norman conquest”
Remedies under common law are of monetary nature
and this may be not always applicable/enough
Equity was developed as a system to resolve disputes
where damages are not a suitable remedy and
“to introduce fairness into the legal system”
Equity operates when there is a recognizable right but no remedy
under the common law – to insure that justice is met
3. Equitable Maxims/Doctrines
Delay defeats equity - Doctrine of Laches
(to prevent any inequitable results)
Will not be awarded if the injured party has not acted fairly
(clean hands – not bad faith)
Equity considers done that which ought to be done
Equity follows the law (not replace statute or common law)
Those who seek equity must do equity (to act fairly)
Will not be awarded if the contract has been affirmed
Will not be awarded if some innocent third party would be
adversely affected
4. Remedies for Breach of Duty
Common law Remedies:
Damages (the key tool to compensate harm, but not to punish)
Action for price (to recover agreed sum)
Quantum meruit (“how much it is worth” – restitutory award)
Equitable Remedies: (to ask court for help “on court’s discretion”)
Specific performance (“just do it”)
Injunction (“don’t do it”, “stop it”)
Mareva injunction (including “freezing order”)
Rescission
(to put parties back into position before contract started)
Rectification (to correct)
5. Contract Discharge Causes
Causes resulting into the contract termination (discharge)
agreement of the parties
frustration (external event, force-majeure)
performance
breach (unless injured party elects to let contract continue):
breach of a condition in the contract (as fundamental term)
renunciation (refusal to perform)
incapacitation (where a party prevents himself from performing
his contractual obligation: sale of thing to the third party,
financial state)
other repudiatory breach (including anticipatory)
6. Contract Breaches & Consequences
Person in breach of contract term (defaulter) has obligation:
1) to pay damages and
2) to continue perform the contract, unless it is discharged by
injured party (to get free from its contract obligations)
in response to:
o defaulter’s fundamental breach (of condition, not warranty)
o contract repudiation by defaulter
(anticipatory breach)
Breach of contract term is not the same as breach of
representation
(remedy for misrepresentation may be applied)
Contract terms may be express or implied (by statute or by
court):
1) business efficacy test (would there be a business sense without
7. Damages as Remedy for Breach
Damages are primary intended to restore the party who has suffered
loss to the same position they would have been in if the contract had
been performed. Loss mitigation (as far as reasonably possible) shall
be cared for by injured party
2 items for the court to consider:
1)measure of damages (not to profit from a claim)
o expectation interest
(to put into position had the contract been performed)
o reliance interest (to compensate for wasted expenditure caused due
to reliance on contract)
remoteness of damages (only awarded if the loss have been
reasonably foreseeable for both parties at the time contract made)
8. Liquidated Damages & Predicted Loss
Calculation of damages can be complicated, however their
size may be pre-calculated to save time/efforts to further
settlement in case of breach
Liquidated damages are as fixed or ascertainable sum
They must be a genuine pre-estimate of loss and may not
serve as punishment (not a penalty clause)
Clause on damages of punitive nature shall not be
enforceable
9. Other Common Law Remedies
Action for price is an action by one party
(who performed the contract) to recover the sum due from
the other party (that has breached it)
Quantum meruit (“how much is it worth”)
is a restitutory award to measure the value of the work
that has been completed
may be sought when one party has already performed
part of the contract for the moment of its redudiation by
the other
is available as an alternative to damages
10. Equitable Remedies
Specific performance - order to perform contract, enforcing
where damages are inadequate compensation and
where the actual consideration has passed
Injunction – to enforce restraints agreed in contracts
“Freezing order” – to restrict defendant dealing with assets (if
the claimant can convince the court that he has a good case
and that there is a danger of the defendant’s assets being
exported or dissipated)
Rescission – right of an injured party to treat the contract as
never having existed
(not only remedy for breach)
11. Lawful Excuse as Remedies Defence
Lawful excuse not to perform contractual obligations:
performance is impossible due to unforseeable event
performance has been tendered, but it was rejected
the other party has made it impossible for him to perform
the contract has been discharged through frustration
the parties have by agreement permitted non-performance
As far as there is no contract breach (due to the lawful excuse)
there is no reason to have the remedies applied
12. Exemption under Common Law
Rules
Exclusion clause is a term that seeks to exclude a party’s
liability for breach of contract
Exemption validity test (common law rules):
1 it must be incorporated into the contract
o by signature (unless effect of the term was misrepresented)
o by notice (not later that the contract is made)
o by previous parties dealings (consistent course of dealings)
1 its wording must cover the loss
(courts interpret the words narrowly against the
interests of the person seeking to rely on the clause)
13. Exemption under UK Statutory Rules
After passing common law test exemption clause should comply
with UK statutory rules contained in:
Unfair Contract Terms Act (UCTA 1977)
Unfair Terms in Consumer Contract Regulations (UTCCR 1999)
UCTA 1977: exempting liability due to negligence
for loss is void (unless be recognised as reasonable)
– in any case is void (where death or personal injury caused)
• UTCCR 1999: exempting consumer’s liability for breach of
– term that is not expressed in plain, intelligible language
– ther which (contrary to the requirements of the good faith) causes
significant imbalance in the parties’ rights and obligations and this
is to the detriment of the consumer