Various remedies exist in contract law. These include:
Damages
Repudiation
Rescission
Specific performance
Injunctions
Restitutionary awards
Damages
Damages are a legal remedy available for breach of contract. Damages are an award of money to compensate the innocent party. The primary purpose of damages is to place the injured party in the position they would have been in had the contract been performed.
Under the rules of remoteness of damage set out in Hadley v Baxendale, a claimant may only recover losses which may reasonably be considered as arising naturally from the breach or those which may reasonably be supposed to be in the contemplation of the parties at the time the contract was made:
There exist various heads of damage under which an amount can be claimed to reflect different types of loss. These include loss of bargain, reliance loss, discomfort or disappointment, inconvenience, diminution of future prospects, speculative damages and liquidated damages.
Repudiation is a remedy available for breach of contract. Repudiation involves bringing an end to the contract. It is only available for breach of condition as oppose to breach of warranty:
Rescission is an equitable remedy available at the discretion of the judge. Rescission seeks to place the parties back in their pre-contractual position and thus represents an unraveling of the contract. Rescission is available where a contract is voidable as a result of a vitiating factor such as misrepresentation, undue influence or duress. The right to rescind may be lost if the claimant affirms the contract, where a third party acquires rights in the goods, through lapse of time or where restitutio in integrum is not possible.
Leaf v International Galleries [1950] 2 KB 86 (Case summary)
Specific performance
Specific performance is an equitable remedy available at the discretion of the judge. It is an order by the court requiring one party to perform their contractual obligation. Whilst it is often said that contracts are made to be performed and parties should be held to their contractual obligations, the courts are often reluctant to order a party to unwillingly perform the contract and specific performance is only available in limited circumstances. In considering whether to grant specific performance the courts look to whether damages would be an adequate remedy, the type of contract and whether equity requires such an order.
1. Where damages are an inadequate remedy:
If the claimant could adequately be compensated by an award of damages for the breach of contract, the courts are unlikely to order specific performance.
Compare the cases:
Nutbrown v Thornton (1805) 10 Ves 159 Case summary
Cohen v Roache [1927] 1 KB 169 Case summary
2. Type of contract
Specific performance is most commonly ordered for contracts for the sale of land
The courts are unlikely to order specific performance for contracts for personal service.
Injunctions are another form of an equitable remedy available only at the discretion of the judge. There are three types:
Interlocutory or interim (temporary injunction until a court hearing)
Prohibitory (a court order that a party must not do something)
Mandatory (an order that a party must do something)
There is an overlap between mandatory injunctions and specific performance which has been recognised by the courts. The courts will not grant an injunction in circumstances that would in effect be an order for specific performance where it would not generally be allowed:
Page One Records v Britton [1968] 1 WLR 157 Case summary
However, this does not prevent the ordering of a prohibitory injunction which may be an indirect way of ensuring compliance with contract:
Lumley v Wagner (1852) 42 ER 687 Case summary
The court may sever terms and only order an injunction in respect of partial obligations:
