Remedies For Breach Of Contract Essay
Remedies for breach of contract
Contrary to what most people might think, the solution for breach of contract is not designed to punish the guilty party, instead it is to protect and preserve the rights and reasonable expectations of the party seeking reimbursement. The purpose of the contract law is that in the event of one party not fulfilling their obligation towards the other party, the party harmed will be compensated for its losses. In most cases the standard solution for breach of contract is money reimbursement, however, in some special cases the court can assign the party to perform a specific performance or injunction. With money reimbursement the court will allow the harmed party to prove to the court the amount of money necessary to reimburse for the losses, in other words, to prove that the amount of money the harmed company is seeking will reflect the guilty company performing the contract. The innocent party has three available options to them, which include self-help remedies, judicial remedies and arbitration.
Self-help remedies centre on lawful acts, which do not involve the option of referring to the court or arbitration. The innocent party under the law may refuse to perform their obligations as stated in the contract until the other party is ready or already has performed its obligations. The solutions of termination and withholding performance are closely related to the seriousness of the breach. Other self-help remedies that the innocent party may use are: deposit penalty taken form the guilty party, set-off, lien, and enforcement of the security. In contracts that involve the sell of goods the innocent party has additional options of stoppage of transit and resale of goods.
Judicial Remedies is an option, which requires the parties to present their case before a court of expert jurisdiction. The options that are available are: to take action for damages, to sue for quantum meruit, to sue for specific performance or to sue for an injunction. In most cases the damages are given to compensate the innocent (injured) party if its expectations have not been meet or if there is a loss of bargain. The award for damages is a substitute remedy, which in common law is reflected by the monetary approach. Common law gives the option to the guilty party to either fulfil the contract or to pay the damages. The Equity law additionally gives the option of granting of specific performance and injunctions to restrain and actual or threatened breach of a negative stipulation. The plaintiff under the common law has the...
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The legal point in question is whether Leila advertisement constitutes a binding contract and that she go can back on her promise of paying the reward $50 to Julie for returning the gold chain and locket to her. Relevant principle of law relating to this issue is that an advertisement made to the world at large is considered as a unilateral offer and not an invitation to treat. The reason for this rule is that making an advertisement to the world at large, any person who follows the instructions has accepted the offer without further bargaining.
For instance, selling a grand piano for $10,000 if any person comes to the offeror on the 1st Sunday morning of the month. In the case of Gunthing v Lynn (1831) 2B & AD 232, Lynn offered to buy a horse from Guthing under a condition that if the horse brings him luck, Guthing will pay ? 5 to Lynn. Similar to the case of Leila advertisement does not state any notice of accepting the offer by calling first. The above principle was clearly stated in the case of Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256, an advertisement was also made to the world at large for paying anyone who brought the product and still got flu.
This would mean that the offer is as promise for the performance of an act made to the whole world for this case is a binding contract. The principle in the case of was further endorse in K Murugesu v Nadarajah  2 MLJ 82, one party makes a promise in return for the performance of an act. The case of Carlill v Carbolic Smoke Ball Co (IBID) is an example of executed consideration where the defendants advertised the promise of a reward for persons to use their smoke balls in a certain manner.
Applying the principle of law, it can be argue that putting an advertisement in the newspaper to the world at large is a unilateral offer. Leila will not be able to ascertain as to who will take up the offer. The person who fulfills the requirement of finding and returning the lost item to Leila is entitled to the $50 reward. Julie who found and returned the gold locket and chain is counted as an acceptance of the offer, with the consequences that a contract exists both parties.
Therefore, Julie has the right of claiming the sum of money that she had invest in reaching to Leila destination. Leila claims that Julie should have called first before returning, however this argument is invalid as this term is not specified in the advertisement. Furthermore, by returning the items, the elements of the contract are satisfied and it need not be achieved through calling. As a counter Argument, if Leila advertisement is only an invitation to treat, there will be no binding contract between Leila and Julie.
An invitation to treat is an invitation to other parties to make an offer to form a contract, the difference between an offer and an invitation to treat is important because accepting an offer is creating a binding contract. While accepting an invitation to treat is actually just making an offer, with this said Leila is inviting people to make an offer. No contract will exist because Julie’s reply will not be the acceptance of an offer. Therefore, Leila can refuse to give the reward. It is not advisable for Leila to go back on her promise when Julie have agreed on the contract.
Julie can take legal actions against Leila if she fails to pay Julie the reward of $50. However, Leila should display more professionalism in her advertisement by stating call before returning to prevent the terms after accepting the offer. Question 1B The legal issue in this question is that will the answer be different if Julie did not read the advertisement Leila posted to the world at large and then was told about the reward by April after she found and returned the locket chain.
The general principle of law applicable to this issue is that Julie returned the locket and chain to Leila after April told Julie about the reward is considered a past consideration. The above principle was clearly established in the case of Roscorla v Thomas (1842) 3 QB 234, R bought a horse from T for $30, after the sales, T promise R that the horse was sound and free of vice. The horse turns out to be vicious. The court held that the T promise was made after the transaction had already been concluded and therefore it’s a past consideration.
Applying the principle of law and authority to the current situation, it can be argued that the rule is not fulfilled as Julie entered into the contract by returning the gold chain and locket without being aware that there is a reward. In other words, the rewards have no impact on Julie’s decision to return the item. As a counter argument in the case of Tweedle v Atkinson(1861) EWHC QB J57, Tweedle just got married and both parties fathers subsequently entered into a contract which provided them to pay a specified sum to Tweedle and he would be entitled to sue for the money.
After the both father dead, the term of the agreement made between the fathers was to sue the executor. The court held that Tweedle could not enforce the contract between the both fathers because he was not in a party and there is no consideration. Consideration must move from the promise but need not move to the promisor. Hence, Julie is unable to claim the reward. In conclusion, the answer will be different as its not advisable for Julie to claim the reward upon finding and returning the locket and chain, the act has already been done before she knew there’s a reward.
Reference Butler, D. , Christensen, S. , Dixon, B. , & Willmott, L. Contract law. Cheshire, G. C. 1. (. C. , Fifoot, C. H. S. 1. (. H. S. , Simpson, A. W. B. (. W. B. , & Furmston, M. P. (. P. (1996). Cheshire, fifoot and furmston’s law of contract. London: Butterworths. Khoury, D. , & Yamouni, Y. S. (2010). Understanding contract law. Chatswood, N. S. W: LexisNexis Butterworths Morris, A. E. , 1952, & O’Donnell, T. (1999). Feminist perspectives on employment law. London: Cavendish Pub. Law Basics,. (2013). Guthing v Lynn (1831) 2B & AD 232 Archives – Law Basics.
Retrieved 15 June 2015, from http://www. law-basics. info/tag/guthing-v-lynn-1831-2b-ad-232/ Sweeney, B. , 1950, O’Reilly, J. N. ,1965- author, & Coleman, A. , author. (2013). Law in commerce. Chatswood, N. S. W: LexisNexis Butterworths. Question 2A The legal issue raised in this question is to discuss the available remedies to Adam as a result of the breach of contract by Edwin to sell the Rolls Royce at an agreed price of $500,000 and subsequently refusing to sell as Edwin heard there was an Arabian sheik on the lookout for rolls Royce and willing to pay $700,000.
The general principle of law applicable to this issue is that the Rolls Royce is a unique product, which is considered as an equitable remedy by using specific performance and injunction. It’s an order by the court to one party to do something specific. For instance, If Joey has spent all her life searching an ideal house, which she finally found when Harry offered his house for sales. If Harry backs out of the agreement, Joey will not be satisfied with damages because it is the house she wants. In this case, the court will order specific performance requiring Harry to sell the house to Joey.
The above principle of law was clearly established in the case of Nutbrown v Thornton (1805) 10 Ves 159, N had contracted to buy machinery from T, a type that was unique and not readily available elsewhere. Subsequently T refused to sell the machinery, the court granted a specific performance and forced T to sell the machinery. The principle of law in the case of Lumley v Wagner  EWHC (CH) J96, W agreed to sing at L’s theatre and no where else, a short while after the contract was made, W wanted to sing for Z.
The court held that W could be restrained by injunction from singing for Z. Similar to the case of Adam and Edwin entering into a contract for the purchase of car, subsequently Edwin wanted to sell the car to an Arabian Sheik who is willing to pay $200,000 more. Using the principle of this case to the current situation, Adam suffered a loss where by the Rolls Royce is a vintage car which is a unique product, by using specific performance Adam can appeal for orders to force Edwin to sell Adam the unique car as stated in their contract.
Injunction could be used to remedy Edwin’s breach of contract by restraining the Arabian Sheik from purchasing the vintage car. However, if the Arabian Sheik fails to obey to the injunction, he would face criminal or civil penalties and may have to compensate damages or accept sanctions for failure of following the court’s order. However, as a counter argument, In the case of Redgrave v Hurd (1881) 20 Ch D 1, Edwin refused to sign the contract because he may be hesitating when he heard that an Arabian Sheik was on the look out for the rare car and is willing to pay $700,000.
This may cause Edwin to have innocent misrepresentation which leads him to made the false statement believing that there was an Arabian Sheik who is willing to pay $200,00 more. All in all, To bridge the contract that Adam have with Edwin, Adam can enforce specific performance against Edwin to force him to follow the contract and injunction can be used on the Arabian Sheik to stop him from buying the car from Edwin. By doing so, it will allow Adam to buy the car from Edwin with the price of $500,000 which Adam initially offered.
Question 2B The legal issue in this question is to discuss whether the answer will be different if the motor vehicle was a late model Mercedes Benz when Edwin breach the contract with Adam as Edwin heard there was an Arabian Sheik on the lookout on it and willing to pay $700,000. The general principle of law applicable to this issue is that Adam who has suffered a loss of a Mercedes Benz due to breach of contract is unliquidated damages.
The above principle was clearly established in the case of Monarch SS CO v Karlshamns Olijefabriker (1948) AC 196, a ship due to sail to Sweden was delayed due to her seaworthiness, by the time it was repaired the war had broken out between Britain and Germany. The owner of the cargo incurred losses when the ship was redirected to discharge in Scotland. The court held that this loss was caused and the owner will be able to compensate the damages. Applying the principle of above case, Edwin who refuses to sell the Mercedes Benz has breach the contract.
Hence it leads Adam to encounter a loss; therefore Adam will be compensate by the money damages. However, as a counter argument in the case of Hochster v De La Tour (1853) 2 E & B 678, D engaged P as courier to accompany him on European tour starting on 1 June. On 11 May, D wrote to P saying that he no longer requires P services. The court held that P was entitled to sue as soon as the anticipatory breach occurred on 11 May. Similar to the case where Adam and Edwin had a contract on purchasing the Mercedes Benz, after having heard that an Arabian Sheik was willing to pay $700,000, Edwin refused to sell the Mercedes Benz.
Therefore, Adam may treat this as anticipatory breach and consider the contract as being discharged. In conclusion, the answer will be different as the advice given would be different if it was the late model of a Mercedes Benz instead of the vintage car due to the price different as well as the rarity of the cars. A different Remedy approach would be used because most car dealer can find Mercedes Benz easily and there is a market price, also Adam suffers no loss where as compared to a vintage car it is a unique product, which is difficult to be obtained from a market.
Hence, Edwin should compensate Adam. Reference Harris, D. (1988). Remedies in contract and tort. London: Weidenfeld and Nicolson. Burrows, A. (1998). Understanding the law of obligations. Oxford, England: Hart. Turner, C. (2006). Contract law. London: Hodder Arnold. Chan, F. , Ng, J. , & Wong, B. (2002). Shipping and logistics law. Hong Kong: Hong Kong University Press. Radan, P. , Gooley, J. , & Vickovich, I. (2009). Principles of Australian contract law. Chatswood, N. S. W. : LexisNexis Butterworths.
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