Equitable and Other Remedies for Breach of Contract

Vocabulary and key legal concepts related to equitable remedies, restitution, guarantees, and indemnities within the SQE1 syllabus.

Action for an agreed sum

A direct remedy, sometimes called an action in debt or for the price, where a claimant sues for a fixed amount of money owed under a contract once the date for payment has fallen due.

Specific performance

An equitable remedy involving a court order that requires a party to actually perform their contractual obligations (other than paying money), typically awarded when damages are an inadequate remedy, such as in sales of land.

Injunction

An equitable remedy awarded at the court's discretion, commonly used to restrain a defendant from doing what they agreed not to do, and granted only when damages would be inadequate.

Mandatory injunction

An extreme and exceptional equitable remedy that orders a defendant to take positive action, such as the demolition of a development built in breach of a restrictive covenant.

Restitution

A remedy intended to prevent one party from being unjustly enriched at the expense of another party, applicable when money is paid under a total failure of consideration or when work/goods are supplied without a finalized contract.

Total failure of consideration

A situation in restitution where the payee has not performed any part of what they were supposed to do under the contract, allowing the payer to recover advanced payments such as the $£500$ in Shakira's case or $£800$ in Bill's case.

Quantum meruit

A restitutionary claim meaning 'a reasonable sum,' awarded for work done or goods supplied as an alternative to damages when a contract is breached or was never formed.

Restitutionary damages

An award of remedies based on the gains made by the defendant rather than the loss suffered by the claimant, used when it would be unfair to allow the defendant to benefit from a breach.

Account of profits

An exceptional remedy where the court orders the defendant to give up the benefit of profits made from a breach of contract, as seen in the case of Attorney-General v Blake [2001] 1 AC 268.

Negotiating damages

Previously called Wrotham Park damages, these are awarded as a sum of money the claimant might reasonably have demanded as a 'quid pro quo' for relaxing a restrictive covenant when no other clear financial loss is suffered.

Guarantee

A secondary obligation where a guarantor agrees to discharge a debt if, and only if, the debtor defaults; it must be 'evidenced in writing' and signed by the guarantor to be enforceable.

Indemnity

A primary obligation where one party promises to reimburse the other pound-for-pound for a particular loss or known liability, such as a $£100,000$ cleanup cost for contaminated land, and does not require written evidence.

Evidenced in writing

A requirement for guarantees meaning that while the contract itself need not be written, some written evidence signed by the guarantor must exist before the creditor seeks to enforce it.