Remedies for Breach of Contract 1

Meaning of Remedy Is the method by which an injured party enforces a right or corrects a loss The remedies available to the injured party will depend on the nature of breach and the results will differ between the parties. 2

Remedies RescissionDamages Specific Performance Injunction Quantum Meruit 3

Rescission Is an equitable remedy Allows an innocent party To cancel the contract Refuse to perform or fulfil his part of the contract 4

Damages The main purpose of damages is to enable the innocent party to receive monetary compensation from the party responsible for the breach of contract To put the injured party back in position that they would occupied if the contract had been performed as originally intended. Damages are calculated on the basis of looking at what the position should have been if the contract had been properly performed. 5

When a contract has been broken, the party who suffers by the breach is entitled to receive from the party who has broken the contract, compensation for any loss or damages caused to him. S 74 Hadley v Baxendale Victoria Laundry (Windsor) Ltd v Newman Industries Ltd. Cases 6

Specific Performance Is a discretionary order granted by the courts directing a person to carry out their obligations under the contract. It is not generally used in breach of contract actions unless prove to be inadequate. Particularly contracts involving land or where subject matter is unique. 7

Injunction An injunction is an order of the court restraining a person from the doing of an act. It will be granted to enforce a negative stipulation in a contract where damages would not be an adequate remedy. 8

Quantum Meruit Means ‘as much as he has earned’ Only arises in cases of part performance. The contract may be discharge by breach, but where the contract is for goods or services, there is a new implied contract imposed by law on the party taking the benefit that it will pay a reasonable amount for the quantum or portion given. 9