equitable remedies

What is specific performance?

- a court order that compels a party to fulfil their obligations as stated in a contract. Instead of the usual remedy of awarding damages (money), the court requires the breaching party to do exactly what they promised to do.

What is an inadequate remedy?

-monetary damages are insufficient to fully compensate an injured party for a breach of contract

What are the rules for specific performance?

- Damages must be an inadequate remedy

- Must not involve the personal service of the defendant

-   Must not require constant supervision of the court or be too vague

-   Must not impose severe hardship on the defendant e.g. commercial or personal hardship

-Claimant must ‘come with clean hands’ and contract must not be unfair

---

what does the election to affirm a contract mean?

-after contract is breached, party wants to continue to enforce contract rather than terminate it 

what is a repudiation?

-the refusal to fulfil a contract

what is the difference between specific performance and an injunction?

-Specific performance- the claimant can ask the court to order the defendant to perform his promise; the defendant will then be in contempt of court if he does not then perform

-injunction- the court orders the defendant not to do something

why is a claimant normally only entitled to claim damages for ‘non delivery’ 

- can usually take his damages and purchase similar goods elsewhere.

why are damages not always an adequate remedy? 

-if for example claimant cannot buy supplies elsewhere due to crisis e.g.. oil crisis

-  an exemption clause in the contract excludes or seriously limits the damages which may be awarded.

what is a interim injunction?

   - a temporary measure designed to give relief until a full hearing can be arranged and a final order made.

why are contracts of personal service not normally specifically performable?

-to make a court order to compel a person to work for somebody they do not want to work for would be an undue restriction on personal liberty.

what is mutuality?

- if one party wants to claim specific performance, then the other party must have been able to match this by claiming specific performance himself (it is not necessary that the other party does actually claim specific performance, just that he would have had the option to do so)

what does discretion mean?

-the authority granted to legal professionals eg. judges, to make decisions based of their own judgement within legal context. 

what is an injunction?

-ordering or forbidding the court to do something

-where the court orders the defendant not to do something

what are damages in lieu?

-damages in place of having equitable remedy

what is affirmation?

-if the innocent party accepts a repudiation, they instantly receive damages

describe the case of Beswick v Beswick

lord denning: old Beswick has a coal round but wants to retire so his pension plan is to sell his business to his younger nephew- will pay older Beswick money weekly for the business + when he dies, he will continue paying old Beswick’s wife. But when he dies, he stops paying wife. The court granted the widow an order of specific performance for the payment owed by PB’s nephew as an administrator to her husband’s estate. The court held that the damages would also not be limited due to the loss that had been caused to PB’s estate. However, the court found that PB’s widow could not claim under her personal capacity as she was a third party to the contract and was not a party to the original agreement.

describe the case of Patel v Ali

House put up for sale, contracts exchanged, decided not to go ahead with sale. the buyers seek specific performance, this was refused: due to defendants circumstances. Since exchanging contracts, MR Ali had become bankrupt and had been sent to prison- leaving mrs ali on her own with children and she is blind and only has one working leg and doesn’t speak any English and is reliant on other people. She is also now pregnant. the court was justified in refusing specific performance on the grounds of hardship. In light of the current scenario, it was held that forcing the sale of the property would inflict hardship to the first defendant which amounted to injustice

describe the case of Denne v light

contracts sealed over fields, but buyer refuses to go ahead with contract. Field was inaccessible without going through someone else’s land- would have meant he had to negotiate rights of way- creates hardship- therefore seller could not claim specific performance

describe the case of Falcke v Gray

Mr. Falcke, an experienced dealer in curiosities, agreed to lease Mrs. Gray’s furnished house and was given an option to purchase certain items, including the two China jars, for £40. Mrs. Gray, unaware of the true value of the jars, initially agreed to this price, advised by her agent.

Subsequently, Mrs. Gray became uncertain about the jars’ value and consulted Mr. Watson, another dealer, who valued them highly and offered £200, which she accepted. The jars were thus sold to Mr. Watson.

Mr. Falcke sought specific performance to enforce the original contract, arguing that damages were inadequate due to the unique nature of the jars.

court refused specific performance- The parties were not on equal footing; Mr. Falcke (with his extensive expertise) knew the value of the jars while Mrs. Gray did not

describe the case of Araci v Fallon

Araci was a horseman, very successful, entered into an agreement with a jockey named Fallon. Fallon would ride Mr Araci’s horses, but if he was to turn down a ride, he would not ride a rival horse in the same race. £30,000 each time he breached the contract. Fallon decides before the race he is going to ride a different horse so Araci wants to find another jockey. He then seeks an injunction to stop Fallon riding anther good horse. Injunction was refused but then it is granted day of races by court of appeal. Court decided that damages were an adequate remedy

decribe the case of Lumley V Wagner

The defendant Johanna Wagner, an opera singer, was engaged by the claimant to perform in his theatre for a period of three months. There was a term in the contract preventing her from singing for anyone else for the duration of the contract. She was then approached by the manager of Covent Garden Theatre, Frederick Gye, who offered her more money to sing for him. The claimant sought an injunction preventing her from singing at Covent Garden Theatre. injunction was granted.

describe the case of Warner Bros v Nelson

betty davis (stage name)- nelson was contracted to warner bros. actors in this time could only work with one studio. She wanted to play in another studios film so warner bros sought an injunction to keep her. Granted injunction.

describe the case of Hill v C.A. Parsons

The defendant, an engineering company, agreed with a trade union that after 12 months, their technical staff would become members of the trade union. The plaintiff was an employee, who had worked for the engineering company for over 30 years and had recently joined a professional engineer union. The defendants gave him one month’s notice to join their trade union, which he did not do. The plaintiff was 63 years of age. Shortly afterward, the company terminated the employment of the plaintiff and thirty-seven others, with one month’s notice. The plaintiff claimed for an injunction to prevent the defendants from terminating his employment.

The plaintiff was owed at least six months’ notice with regards to the termination of his employment. Further to this, damages were not considered to be an adequate remedy and therefore the plaintiff was entitled to be able to rely on an injunction to prevent the defendant’s actions.

describe the case of Cohen v Roche

The claimant owned a furniture shop and entered an agreement to purchase a quantity of Hepplewhite chairs to sell in his shop. The defendant, in breach of contract, refused to deliver the chairs. The claimant sued for breach of contract and sought specific performance for delivery of the chairs.

Held:

The court refused to grant specific performance. The claimant would be adequately compensated by an award of damages. The chairs were considered 'ordinary articles of commerce and of no special value or interest'. The claimant could have purchased the chairs elsewhere.

what is the right to rescind rule

a buyer misled by material misrepresentation has the right to rescind contract even after goods have been delivered

describe the case of Behnke v Bede Shipping

In this case, Behnke (the buyer) entered into a contract with Bede Shipping Co Ltd (the seller) to purchase a ship. The seller had made a statement about the condition of the ship, suggesting that it was in a seaworthy state, and Behnke relied on that statement when agreeing to buy it. After the contract was formed, Behnke discovered that the ship was not seaworthy as represented by the seller.
The Court of Appeal ruled in favor of Behnke, allowing rescission of the contract. The court found that the misrepresentation made by the seller about the condition of the ship was material, and it had induced the buyer to enter into the contract. Since the misrepresentation went to the heart of the contract, Behnke was entitled to rescind the agreement and was not bound by it, despite having received possession of the ship.

describe the case of Howard E. Perry Ltd v BRB-

The claimant contracted to buy steel from the defendant. Under the contract terms, the claimant acquired property in the steel before it was delivered. The steel was of a kind where it could not be left in storage too long or it would become unworkable. There was no other market on which the claimant could buy substitute steel.

The defendant’s employees went on strike and refused to deliver the steel. The claimant sought the defendant’s permission to go collect the steel themselves. However, the defendant refused because they were afraid that this would trigger further industrial action.

The claimant sued the defendant for conversion by wrongful interference with their property.

The High Court held in favour of the claimant and ordered delivery of the steel. The defendant’s refusal to deliver or allow the claimant access to the steel effectively denied the claimant their rights of ownership (which includes possession) for an indefinite period of time. The defendant’s fear of industrial action was not a valid justification for doing this. Therefore, the defendant had wrongfully interfered with the claimant’s property,

Delivery up was an appropriate remedy in this case. Since there was no alternative market for the steel, damages would not adequately compensate the claimant.