Remedies | Contract Law

1. Remedies For
Breach Of Contract
CONTRACT LAW | ASSIGNMENT 02 | GROUP 18

2. CONTENTS
1. INTRODUCTION
2. DAMAGES
3. SPECIFIC PERFORMANCE
4. RESTITUIONARY AWARDS/RESTITUTION
5. RESCISSION
6. INJUNCTION
7. LIMITATIONS OF ACTIONS
8. CONCLUSION

3. What is the breach of contract
Breach of Contract Occurs when one party fails to fulfill
contractual obligations
Definition for other remedies and types of remedies
A “remedy” is a court-ordered resolution or compensation
for one party's breach of contract in contract law. The goal of
remedies is to make the non-breaching party, also known as
the “injured party,” whole by placing them in the position
they would have otherwise been in had the contract been
performed as agreed.
INTRODUCTION

4. 01. Damages
02. Specific performance
03. Rescission
04. Restitution
05. Liquidated Damage
06. Injunction
The following points discuss the practical uses of other remedies and the
limitations of those other remedies.

5. DAMAGES

6. Damage are of monetary value granted to compensate the injured party for the loss
they have faced. With the purpose of placing the claimant in the same situation if the
contract had been performed.
• Compensatory damages
• Consequential damages/special damages
• Nominal damages
• Liquidated damages
• Punitive damages
• Statutory damages
• Restituitory damages
DAMAGES AND TYPES

7. NATURE AND CIRCUMSTANCES AS TO WHEN DAMAGES ARE GRANTED
 Damages are not punitive despite the outrageous conducts of the defendants.Punitive
damages are granted in tort cases.
 Addis vs Gramaphone –
 Damages are not usually given for mental distress caused by the breach of contract
however if the purpose of the contract is to provide enjoyment damages can be granted.
 Jarvis vs Swan Tours Ltd –
 Loss of reputation – Even though damages won’t be granted to loss of reputation but if the
loss of reputation is caused by the breach of contract and causes financial loss.
 Malik vs Bank of Credit and Commerce International SA –

8. HOW DAMAGES ARE ASSESSED
• To determine the awards a claimant wanted assessment of damages is necessary.
• Expectation measure – position which compares the claimant’s current position and the position they would have been in if the contract
had been performed and to assess this type of damages they have to check if it’s foreseeable. This principal was stated in Robinson vs
Harman.
• Example if a machinery is not delivered to a person or delivered late the person is deprived of the use of it and can claim for damages.
• Reliance measure put the claimant back in the position done when the parties have been subject to expenditure in preparing for their side of
bargain. expenses incurred prior to and in anticipation of making of the contract are recoverable however it should have been reasonably
contemplated by the party. when the contract is not profitable. reliance measure is favorable.
• But you can choose either reliance measure or expectation measure. Claimants have to decide on which will compensate them
favourably.Angelica Television vs Reed – the television company the actor threw away the opportunity to act for a better role the company
claimed for 2750£.
• The above mentioned case the claimant had the expectation of profit but it was deprived and hance claimed for damage.

9. • The claimant’s loss of bargain is assessed in two ways
• Difference of value : Difference in value between the performance received and the value that was promised.
• Cost of cure : what it has cost or will cost the clamiant to have the contract performed by a third party.
• Causation
• In order to be eiligible for damages claimant must satisfy show that the defendant’s act is an effective cause of
the breach.If anything that is likely to happen it won’t break the chain of causation.
• Monarch steamship Co ltd vs Karshamms Oljefabricar – Voyage was delayed by unseaworthiness and war broke
out and was diverted by admirality action held it did not break the chain of causation.
• Remoteness
• After the test of causation remoteness test is applied.If some lossess are too remote damages won’t be granted.
• Hadley vs Baxendale – Damages must arise naturally/in the ordinary course of things or within the reasonable
contemplation of the parties.

10. Duty To Mitigate
• Mitigation
• Innocent party must take reasonable steps to mitigate the extent of the damages.
Own failure of he innocent party to behave reasonably after the breach can’t
claim for compensation. Law imposes a duty on an innocent party to mitigate
their loss.
• Shindler vs Northern raincoat co.ltd – managing director with a survive
agreement for ten years and arbitrarily removed. when the company gave a
different offer plaintiff refused. Employee who was wrongly dismissed must look
for another job or else he will only be entitled to nominal damages

11. SPECIFIC PERFORMANCE

12. What is Specific Performance?
• Specific performance is a legal remedy where a court orders a party to fulfil
the terms of a contract rather than awarding monetary damages. It's
typically used when the subject matter of the contract is unique and
monetary compensation wouldn't adequately remedy the breach.
Types of specific performance
1) Positive- specific performance
2) Negative- Specific Performance

13. Scenario
Example Fact for Breach of Contract:
Imagine Party A agrees to sell a rare, vintage painting to Party B for $50,000. The contract
specifies that the painting is a unique piece of art and is crucial for Party B's private collection.
The agreement outlines a delivery date and the payment upon receipt of the painting.
Breach of Contract:
Upon the agreed-upon delivery date, Party A fails to deliver the painting to Party B as stipulated
in the contract, constituting a material breach.
Applying Remedy of Specific Performance:

14. Notice of Breach:
Party B should promptly notify Party A of the breach, providing clear details on the failure to deliver the painting within
the agreed timeframe.
Petition for Specific Performance: Party B can file a legal petition requesting specific performance, asking the court to
order Party A to fulfil the contract by delivering the unique painting.
Court Decision:
If the court finds that damages would be an inadequate remedy and that the painting is indeed unique, it may grant
specific performance, compelling Party A to deliver the rare artwork.
Enforcement:
The court's order becomes legally binding, and if Party A still refuses to comply, the court may enforce the order through
legal means, such as fines or other penalties.

15. Application of Specific Performance
1) Unique Property
2) Land Sale Contracts
3) Personal Service contracts
4) contracts Involving Intellectual property
5) Contracts Involving special Goods
6) failure of Substitute Performance

16. Case law
Posner v warren (1835)
Beswick v Beswick (1968)
Example: FRY V LANE (1888)
• Judges Opinion about “ specific performance”
• Specific performance is used when a unique contract subject makes damages
insufficient; rare property justifies this equitable remedy over monetary
compensation.

17. RESTITUTION

18. 1.What is restitution ?
 Restitution has long been recognized as an optional remedy for breach of contract.
 Restitution restores the claimant to the position it was in before the defendant had
been unjustly enriched at its expense.
 Restitution is often used when a contract is determined to be unenforceable, but the
innocent party already conferred a benefit to the other party.

19. Example :-
Microsoft and Nokia
Background: Microsoft acquired Nokia's smartphone business, and Nokia agreed to exclusively
use Microsoft's Windows Phone operating system.
Breach: Nokia later breached the contract by releasing smartphones running on Android,
deviating from the exclusive use of Windows Phone.
Restitution: Microsoft, as the innocent party, sought damages for the breach, and the companies
eventually settled out of court.
 By contrast, in 1989 the Israeli Supreme Court for the first time allowed this remedy in Adras
Building Material v. Harlow & Jones GmbH,2 considered to be an important landmark in the
jurisprudence of the law of restitution.

20. 2. Conditions to receive the remedy of restitution
For a claim in restitution to succeed, the claimant must show that :
1. The defendant has been enriched. This could be in terms of money, but can also be
other benefits, whether direct or indirect, and includes saving from expenses and
discharging obligations;
2. The enrichment was at the claimant's expense; and
3. The enrichment was unjust. There may be one or more of a number of reasons why
enrichment may be unjust, including (non-exhaustively) mistake, duress, undue
influence, failure to provide consideration for a benefit, illegality, and so on.

21. 3.Important Cases for the restitution
 Barton v Gwyn-Jones
 Quinn Infrastructure Services v Sullivan & Ors
 Reasons of importance
 they are examples of circumstances in which restitution can assist a claimant where other causes of action
do not exist or would fail
 they reinforce the importance for commercial parties of a properly and comprehensively drafted written
contract;
 they highlight the conceptual differences between unjust enrichment and quantum meruit claims; and
 they are potentially indicative of a growing trend towards claimants advancing and litigating commercial
disputes in increasingly inventive ways.

22. 4.Practical situation of this remedy
 In considering whether a party has been unjustly enriched or whether a party deserves
an award, the court can take into account factual and commercial considerations such
as:
 Whether the enrichment or service provided was of a kind that would normally be
provided freely.
 The nature of the benefit received by the defendant.
 The nature of the risks incurred by the claimant.
 Whether the defendant has behaved unconscionably in declining to pay. (This latter
consideration is likely to be a strong indicator in favor of making a restitutionary
award.)

23. RESCISSION

24. 1.What is rescission ?
 Rescission is the voiding of a contract by a court that does not recognize it as legally
binding.
 Courts can free non-liable parties from their obligations in a contract.
 Rescission can occur when there is a material error in the contract, evidence of fraud, a lack
of legal or mental capacity, or other applicable circumstances.
 Many states offer rescission on various business-to-consumer (B2C) contracts.
Example:
 Party A and Party B enter into a contract for the sale of goods with a condition that the
goods will be delivered by a specific date. If Party B fails to meet the condition, Party A
may seek rescission.

25. 2.Termination Requirements
 Material Breach
 Innocent Party
 Timely Notice
 Mutual Mistake, Fraud, or Misrepresentation
 No Affirmation or Waiver
 Restoration of Consideration
 Equitable Considerations
 Impossibility of Performance
 Legal Capacity

26. 1. Important Cases for the rescission
 Mutual Mistake
 Sherwood v. Walker (1887)
 Fraud or Misrepresentation
 Derry v. Peek (1889)
 Duress
 Barton v Armstrong [1976] AC 104
 Impossibility of Performance
 Taylor v Caldwell (1863)

27. LIMITATIONS OF ACTIONS

28. Limitation to when the remedies are not granted;
• The abovementioned remedies are however subject to certain limitations,when
granting damages the injured party has to seek alternative and act reasonably
before claiming damages.
• In specific performance works for personal services and goods of uniques quality
remedy won’t be granted.
• This shows even innocent parties have a responsibility and there is a limit to
remedies. In terms of circumstances.

29. • Refers to pre-established restrictions within the contract regarding remedies for a
breach.
• Ex : Contract may specify limited monetary damages as the sole remedy for a breach.
Guides dispute resolution by adhering to the agreed-upon limitations.
• Illustration: Non-breaching party might be restricted from seeking injunctive relief as
per the contract terms.

30. Limitation act 1980
• In case of lapse of time the defendant won’t have evidence to rebut
such claims. This act says if an action arises in contract for remedies
it must be within 6 years.
• When there is an action for restitution it should also be claimed
within 6 years.

31. INJUNCTIONS

32. What is Injunction?
An injunction is a remedy granted by the court that prohibits the commission of a
wrong threatened or the continuance of a wrongful course of action already begun. If
a party fails to comply with an injunction granted by a court, then the party could face
criminal or civil penalties or contempt of court.
When is injunction invoked?
The Indian legal system doesn’t facilitate an application for an injunction, unless and
until in the existence of a possibility of an irreparable injury. Irreparable injury is a
scenario wherein it is proved that the harm inflicted on the applicant cannot be
amended in any other form.

33. Classification of Injunctions
The following are the different types of the injunction:
• Preliminary injunction
• Preventive Injunction
• Mandatory injunction
• Temporary restraining order
• Permanent injunction
 Campbell v Mirror Group Newspapers-2004
 eBay Inc . V MercExchange, L.L.C” (2006)
 Apple Inc. V. Samsung Electronics Co.(2012)

34. CONCLUSION

35. As we can see there are more than one remedy granted to the breach of
contract when damages weren’t enough claimants could opt for specific
performance and recission and injunction. While focusing on giving
justice to the injured parties remedies still limit them from acting
unreasonably by forcing the party to take reasonable step to mitigate the
loss and seek alternatives and also limit the time period through
limitations of act 1980 saying certain remedies can’t be claimed after a
lapse of time remedies focuses on restoration rather than punishing the
parties and when the demands are impossible they need not to be
performed as stipulated by the limitations of specific performance.