Chapter 21

Getting an adequate remedy

- P359
- In seeking to ensure a contracting party obtains an adequate remedy in the event of
a breach of contract- we must extend our discussion beyond the remedy of
damages.
- Many methos which can be used in an effort to ensure an effective remedy is
obtained.

- In the first place- the contract can be structured in such a way as to entitle one party
to withhold the performance of his obligations or to entitle one party to terminate
performance and claim loss of bargain damages
- Such remedies may provide a powerful incentive to the other party to refrain from
breaking the contract and to perform his obligations under the contract.
- Alternatively, the parties may make provision in their contract for a sum of money to
be payable by way of damages in the event of breach
- Finally, an adequate remedy can be obtained by seeking an order of specific
performance or an injunction restraining a threatned breach of contract

The entire obligations ( or ‘ entire contracts’) rule

- The ability of one contracting party to withhold performance of his obligations under
the contract gives to the other party an extremely powerful incentive to perform his
contractual obligations.
- For instance- a house owner and a buider agree the builder to make a garage for 8k.
contract says the payment will be made only upon satisfactory completion of the
work by the builder. The house owner’s obligation to pay the promised sum is
dependent on it being completed. If the builder breaches the contract- cant sue for
payment. Claim is barred by the obligations rule.

- ‘ entire obligations’- more accurate title for this rule.

- Some cases- little practical difference between an entire contract and obligation: his
obligation. In the construction example- no difference between contract and
obligation- but if there is a provision for payment upon the completion of distinct
stages of the project- each completion is a condition precedent and right to claim-
obligation to complete each stage may be entire even though its not the contract as
a whole.

- Cutter v Powell- cutter agreed with powell to ‘ proceed, continue and do his duty as
second mate’ on a ship sailing from jamica to England. Cutter died on the journey
and the widow sued for wages apayble in respect of his death which he performed-
failed because he didn’t complete the voyage. Powell obtained the services of cutter
for some 7 weeks. Contract carried out according to terms- but unjust enrichment of
the innocent party.
 - Harshops to which the rule can give rise are mitigate by its many exceptions-
principal is the rule is alleged not to apply where the party is in breach and has
substantially performed by his obligations under the contract- hoeing v isaacs and
Williams v roffey bros. in such a case- the party has to perform their obligations
under the contract ( usually the pay price) and content himself with an action for
damages for loss suffered under the breach.

- Hoenig v Isaacs- where the builder had completed work, defectively, there was no
need to resort to any doctrine of substantial performance. The obligation was entire-
namely the obligation to complete the work- had been performed and so the
employer was required to pay the price- subject to the claim for damages in respect
of the breach of the non-entire onligation in a work like manner. Although there is
much to be said for this view- it has not been expressly adopted by the court- who
still tend to insist upon substantial performance, the party in breach is entitled to
claim the price- subject to a counter claim for damages.

- P361- the second exception is an innocent party may be required to recpmpense the
party in hreach if he accepts the latter’s performance. Difficult to establish because
the acceptance of the innocent party occurs in the context of complete contractual
performance and it is not pro-ratable. Was initially seen as more of a nuisance-
Sumpter v Hedges.

- court may interpret the contract as consisting of a number of obligations so each

obligation has been completely performed, the party in breach may lciam the sum
promised in relation to the performance of the obligation.

- The ability of the contracting parties to take steps to minimse the impact of the
entire obligations rule has probably preserved the rule as part of English law.

Creation of conditions.

- Another effective remedy is to threatned to terminate performance of the contract

in the event of a repudiatory breach of contract and claim loss of bargain damages

- P362

Liquidated Damages

- Alternative method of avoiding undercompensation is to insert into the contract and

clause which states the amount of money which

- P372
Specific Performance

- C who wishes to secure an adequate remedy may seek specific performance.

 - Requires the party in breach to perform
- Not needed

Injunction

- Not needed

- P376

Damages in lieu of specifc performance

- High Court has a discretion to award C damages in lieu of an injunction of specific

performance.
- Where the court decides to exercise its discretion to award damanges- damages are
assessed on the same basis as common law damages for breach of contract (
Johnson v Agnew) p [400] and Surrey CC v Bredero Homes Ltd, 1366-67.