9. Remedies of a contract - Remedies for Breach of Contract...

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Remedies for Breach of Contract Judicial Remedies contrasted with Self-help Remedies Breach of condition that causes one party to be deprived substantially of the whole benefit Aggrieved party may choose to bring the contract to an end (“self-help” remedy) Judicial Remedies: when aggrieved party suffers financial losses or where outstanding obligations will cause financial loss, discharge of contract alone may not be an adequate remedy. Types of Judicial Remedies: 1) Common law remedy of damages (of right) 2) Common Law remedy of an action for a fixed sum (of right) 3) The Equitable remedy of specific performance (discretionary) 4) The equitable remedy of injunction (discretionary) Availability of Judicial Remedies: Limitation Periods and Laches Limitation Act; equitable doctrine of laches: Access to Judicial remedies may be barred by a lapse of time S 6 Limitation Act: No action may be brought for a breach of contract after 6 years have lapsed from the time when the contract was breached. Does not apply to any legal action rooted purely in unjust enrichment Applies to equitable remedies of specific performance and injunction (s 32 Limitation Act) access to judicial remedies may be denied if the delay is inordinate and inexcusable, such that it would be inequitable to grant remedies. 1) Depends on the length of the delay 2) And whether the defendant acquiesced the in the delay
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1)Contract damages at common law: Compensation for Pecuniary Loss (monetary) Contractual damages to an aggrieved party is in the form of a sum of money in compensation for pecuniary losses a) Compensation Only Damages are compensatory in nature (hardly awards punitive damages for breach of contract) HOWEVER, they can be contrasted with a tort damages Case: Addis v Gramophone Company, Ltd (1909) - traditionally only pecuniary loss Case : Whiten v Pilot Insurance Co (2002) – insurance case. Plaintiff recovered losses, and received additional punitive damages as the defendant had acted in bad faith. b) Liquidated compared with Unliquidated Damages Liquidated damages - pre-agreed damages for a breach in contract. If it is a genuine pre- estimate, then the courts will order the sum to be paid as compensation Unliquidated damages – Where the pre-agreed sum is a penalty is intended to punish the party in breach, the court will strike down the penalty and award unliquidated damages instead. May result in damages greater than that set by the penalty clause Case: Public Works Commissioner v Hills (1906) Principles for distinction between liquidated damages clause and a penalty clause: Case: Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor company, Ltd (1915) 1) The court has to find out if a payment is in truth a penalty or liquidated damages 2) The essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre- estimate of damage 3) Sum is a question of construction to be decided upon the terms and inherent
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