1. Copyright Guy Harley 2008 1 Revision

2. Copyright Guy Harley 2008 2 Types of Remedy  Termination  Rescission  Recovery of Contract Price  Damages  Equitable Remedies  Specific Performance  Injunction  Rectification  Restitution

3. Copyright Guy Harley 2008 3 Damages  2 Types  Liquidated Damages  Unliquidated damages

4. Copyright Guy Harley 2008 4 Agreed Damages  The contract may provide for agreed damages  Agreed damages must be a genuine pre- estimate of damages  Courts will not enforce a penalty

5. Copyright Guy Harley 2008 5 Penalty An agreed damages clause will be a penalty if  It is extravagant  Where breach is failure to pay money and clause provides for a greater payment  Applies to several different types of breach

6. Copyright Guy Harley 2008 6 Unliquidated Damages  The amount of damages should place the innocent party in the same position that he would have been in had the contract been properly performed  Damages can include  Expectation loses  Personal injuries  Disappointment, distress and discomfort

7. Copyright Guy Harley 2008 7 Damages for Disappointment etc  Courts have been reluctant to award damages for disappointment, distress and injured feelings  Not awarded for breach of most commercial contracts  Two cases where may be awarded;  Distress flows from physical inconvenience  Where enjoyment or entertainment or freedom from molestation is an essential feature of the bargain

8. Copyright Guy Harley 2008 8 Remoteness of Damage (cont.) A two part test  Losses that flow ”according to the usual course of things” from the breach  Losses within the actual contemplation of the parties at the time the contract was made

9. Copyright Guy Harley 2008 9 Mitigation of Damages  Plaintiff has a duty to mitigate losses  Cannot claim losses which could have been reduced or avoided by the taking of reasonable steps

10. Copyright Guy Harley 2008 10 Specific Performance  Court orders a party to carry out their contractual obligations  Not available if:  Damages would be an adequate remedy  Court has to continually monitor performance  Used to enforce a contract for personal services  Against a minor

11. Copyright Guy Harley 2008 11 Injunction  Court orders a party to a contract to refrain from breaching their contractual duty  Not available if  damages would be an adequate remedy

12. Copyright Guy Harley 2008 12 Quantum Meruit  Where one party requests goods and\or services without specifying a price  Implied promise to pay a reasonable amount  Need not show loss by plaintiff only benefit by defendant  Applies where  Contract formed but no agreed price  Partial performance of a contract has been accepted  Contract is void  Contract is breached

13. Copyright Guy Harley 2008 13 Agency

14. Copyright Guy Harley 2008 14 Agency - Definition  An agent  Has legal authority  To affect the legal rights and obligations  Of the principal  In dealings with third parties

15. Copyright Guy Harley 2008 15 Agency - Requirement  A person cannot always act personally  Agencies are usually created for the making of contracts in commercial situations  It is a fiduciary relationship

16. Copyright Guy Harley 2008 16 Agency - Contracts  Two contracts  Between agent & principal  Between Principal and Third Party  A principal is liable for the acts of an agent that are committed within his authority

17. Copyright Guy Harley 2008 17 Types of Agent  Universal Agent  Can enter into all contracts on behalf of principal  General Agent  Agent has usual authority of someone in that position in that trade  Special Agent  Given instructions to carry out a specific task

18. Copyright Guy Harley 2008 18 Types of Agency  Actual agency  Express  Implied  Agency by Necessity  Apparent Agency (Ostensible agency)  Agency by Ratification

19. Copyright Guy Harley 2008 19 Agency by Necessity  Agency arises in an emergency situation  Three requirements  Agent is legally in possession of Principal’s property  Immediate action is required to avoid loss  Agent is unable to communicate with Principal to obtain instructions  Springer v Great Western Railway  Great Northern Railway v Swaffield

20. Copyright Guy Harley 2008 20 Apparent\Ostensible Authority  Agent has no actual authority but Principal’s actions lead Third Party to believe that Agent has authority  4 conditions  A representation made by Principal to Third Party  No actual authority  Third Part is induced to enter into contract  Principal had capacity to enter contract

21. Copyright Guy Harley 2008 21 Apparent\Ostensible Authority  Tooth v Laws  Derham v AMEV

22. Copyright Guy Harley 2008 22 Agency by Ratification  Agent does not have authority  Principal later ratifies (i.e. authorises) agent’s actions

23. Copyright Guy Harley 2008 23 Agency by Ratification - Requirements  Agent expressly contracts on behalf of Principal  Keighley Maxstead v Durant  Principal must be in existence at time of contract  Principal must have capacity at time of ratification  Principal must act within reasonable time  Contract must not be void  Whole contract must be ratified  Langlands v Worthington  Ratification must be retrospective

24. Copyright Guy Harley 2008 24 Duties of Agent  To follow Principal’s instructions  To use reasonable care & skill  Not to make a secret profit  Not to disclose confidential information  To keep proper accounts Breach of duty = breach of contract

25. Copyright Guy Harley 2008 25 To Use Reasonable Care & Skill  Where paid must use the skill & competence of a reasonable agent in the same trade  Mitor Investments v General Accident Fire & Life

26. Copyright Guy Harley 2008 26 Not to Make a Secret Profit  Agent must not take advantage of position to obtain extra benefit from Third Party of which Principal is not aware  Reiger v Campbell-Stuart

27. Copyright Guy Harley 2008 27 Not to Disclose Confidential Information  Fiduciary relationship  Duty to disclose facts material to Principal’s decision to contract with Third Party  Must act in Principal’s best interests

28. Copyright Guy Harley 2008 28 Keep Proper Accounts  Money received on behalf of Principal must be held in a separate account (trust account)

29. Copyright Guy Harley 2008 29 Rights of Agent  Right to Remuneration  Paid agreed amount  If no agreed amount then what is reasonable  Right to indemnity  Principal must reimburse expenses reasonably incurred  Principal must pay any claims against agent  Right to a Lien

30. Copyright Guy Harley 2008 30 Liens  Particular Possessory Lien  Where Agent has purchased goods on behalf of Principal  Can retain goods until Principal pays for them  General Possessory Lien  Agent can retain any of Principal’s goods in Agent’s possession until paid

31. Copyright Guy Harley 2008 31 Third Party’s Rights  Can take action against Agent where Agent has no actual authority (breach of warranty of authority)  If Agent has not disclosed agency, can take action against Agent under contract  If Agent has disclosed agency, can only take action against Principal under contract  Can always take action against Principal both in contract and tort

32. Copyright Guy Harley 2008 32 Independent Contractors  Independent Contract acts on own behalf but does work for “Principal”  International Harvester v Carrigan’s Hazeldene  Person hiring independent contractor is not liable for their actions  Two contracts between  independent contractor and Third Party  “principal” and independent contractor  Use of the word “agent” is not conclusive  Potter v Customs & Excise Commissioners

33. Copyright Guy Harley 2008 33 Indicators of agency  Who keeps the profits and bears losses?  Who provides office, staff, tools etc?  Who decides when, where and how work is carried out?  Is the agent paid a commission?  Does agent receive money on behalf of the principal  Does agent pay money on behalf of the principal  Is agent authorised to make representations for which the principal will be responsible  Is the agent required to account to the principal?