Law Of Contract: Remedies For Breach Of A Contract: Equitable: Nature Of Specific Performance; Specific Restitution; Rescission; Injunction (Copy)
Specific Performance
Nature of Specific Performance
Definition
- Specific performance is an equitable remedy ordering a party to carry out their contractual obligations exactly as promised.
- Instead of awarding money, the court compels actual performance.
Purpose
- To enforce the contract itself.
- To provide the claimant with the promised performance.
- To protect contractual expectations where damages are inadequate.
Examination Principle
The court asks:
- Would damages adequately compensate the claimant?
If yes:
- Specific performance will normally be refused.
If no:
- Specific performance may be granted.
Beswick v Beswick [1968] AC 58
Facts
- Uncle transferred business to nephew.
- Nephew promised to make weekly payments to widow.
- Payments ceased.
Judgment
- Specific performance granted.
Legal Principle
- Specific performance available where damages are inadequate.
Importance
- Leading authority.
Application
- Frequently examined.
Sky Petroleum Ltd v VIP Petroleum Ltd [1974] 1 WLR 576
Facts
- Petrol supplier stopped deliveries during a fuel shortage.
- Alternative supplies unavailable.
Judgment
- Equitable relief granted.
Legal Principle
- Specific performance may be available where substitute performance cannot easily be obtained.
Application
- Important commercial authority.
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
Facts
- Landlord sought order requiring supermarket to continue trading.
Judgment
- Specific performance refused.
Legal Principle
- Courts avoid orders requiring constant supervision.
Application
- Important limitation.
Situations Where Specific Performance Commonly Applies
Sale of Land
Legal Principle
- Every piece of land is regarded as unique.
Sudbrook Trading Estate Ltd v Eggleton [1983] AC 444
Facts
- Contract concerned transfer of land.
Judgment
- Specific performance granted.
Legal Principle
- Land contracts are particularly suitable for specific performance.
Application
- Frequently cited.
Verrall v Great Yarmouth Borough Council [1981] QB 202
Facts
- Council attempted to cancel booking of conference hall.
Judgment
- Specific performance granted.
Legal Principle
- Unique contractual rights may justify specific performance.
Application
- Important authority.
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Specific Restitution
Nature of Specific Restitution
Definition
- Specific restitution is an order requiring the return of specific property to its rightful owner.
- The remedy restores possession rather than awarding compensation.
Purpose
- Recovery of the actual item.
- Restoration of the claimant’s property rights.
Examination Principle
- Concerned with return of property rather than enforcement of future obligations.
Re Wait [1927] 1 Ch 606
Facts
- Buyer contracted for wheat.
- Goods had not been specifically identified.
Judgment
- Specific restitution refused.
Legal Principle
- Property must be identifiable before specific recovery can occur.
Application
- Important limitation.
Nutbrown v Thornton (1805) 10 Ves 159
Facts
- Contract involved specific machinery.
Judgment
- Recovery ordered.
Legal Principle
- Specific restitution may be granted where goods are unique and identifiable.
Application
- Classic authority.
Duke of Somerset v Cookson (1735) 3 P Wms 390
Facts
- Unique silver altar piece involved.
Judgment
- Return ordered.
Legal Principle
- Equity protects unique property.
Application
- Historical authority.
Rescission
Nature of Rescission
Definition
- Rescission sets the contract aside and attempts to restore the parties to their pre-contract positions.
- Contract is treated as though it had never existed.
Purpose
- Reverse the transaction.
- Undo the effects of the contract.
Examination Principle
- Rescission differs from termination.
- Rescission aims to unwind the contract completely.
Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525
Facts
- Vehicle obtained through fraud.
- Owner attempted to rescind before vehicle transferred to innocent purchaser.
Judgment
- Rescission effective.
Legal Principle
- Rescission may be exercised where appropriate grounds exist.
Application
- Leading authority.
Clough v London and North Western Railway Co (1871) LR 7 Ex 26
Facts
- Misrepresentation induced contract.
Judgment
- Right to rescind recognised.
Legal Principle
- Rescission restores parties to original positions.
Application
- Important authority.
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218
Facts
- Company induced into contract by misrepresentation.
Judgment
- Contract rescinded.
Legal Principle
- Equity seeks restoration of original positions.
Application
- Frequently cited.
Bars to Rescission
Affirmation
Long v Lloyd [1958] 1 WLR 753
Principle
- Continuing with contract after discovering the problem may bar rescission.
Lapse of Time
Leaf v International Galleries [1950] 2 KB 86
Principle
- Excessive delay may prevent rescission.
Impossibility of Restoration
Vigers v Pike (1842) 8 Cl & Fin 562
Principle
- Rescission unavailable where restoration is impossible.
Third Party Rights
Phillips v Brooks [1919] 2 KB 243
Principle
- Intervention of innocent third-party rights may prevent rescission.
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course
Injunction
Nature of Injunction
Definition
- An injunction is an equitable order directing a party:
- To do something; or
- To refrain from doing something.
Purpose
- Prevent future breaches.
- Protect contractual rights.
- Preserve the status quo.
Prohibitory Injunction
Definition
- Prevents a party from carrying out specified conduct.
Lumley v Wagner (1852) 1 De GM & G 604
Facts
- Opera singer agreed not to perform elsewhere.
- Threatened to sing for rival theatre.
Judgment
- Injunction granted.
Legal Principle
- Court may restrain breach of a negative covenant.
Importance
- Foundational injunction authority.
Application
- Frequently examined.
Warner Bros Pictures Inc v Nelson [1937] 1 KB 209
Facts
- Actress Bette Davis agreed not to work for competitors.
- Threatened breach.
Judgment
- Injunction granted.
Legal Principle
- Negative obligations may be enforced by injunction.
Application
- Leading authority.
Mandatory Injunction
Definition
- Requires a party to perform a specific act.
Application
- Less common than prohibitory injunctions.
Redland Bricks Ltd v Morris [1970] AC 652
Facts
- Land subsidence caused by excavation.
Judgment
- Court considered mandatory injunction.
Legal Principle
- Mandatory injunctions granted cautiously.
Application
- Leading authority.
Interlocutory Injunction
Definition
- Temporary injunction granted before trial.
Purpose
- Preserve rights until full hearing.
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Facts
- Patent dispute.
- Interim injunction requested.
Judgment
- House of Lords established guidelines.
Legal Principle
Court considers:
- Serious issue to be tried.
- Adequacy of damages.
- Balance of convenience.
Importance
- Leading authority on interlocutory injunctions.
Application
- Frequently examined.
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course
Comparison of Equitable Remedies
| Remedy | Purpose | Leading Authority |
|---|---|---|
| Specific Performance | Compel contractual performance | Beswick v Beswick |
| Specific Restitution | Return specific property | Nutbrown v Thornton |
| Rescission | Set aside contract and restore parties | Car & Universal Finance v Caldwell |
| Injunction | Prevent or compel conduct | Lumley v Wagner |
Key Examination Cases
Specific Performance
| Case | Principle |
|---|---|
| Beswick v Beswick | Damages inadequate |
| Sky Petroleum v VIP Petroleum | Alternative performance unavailable |
| Sudbrook Trading Estate v Eggleton | Land contracts |
| Verrall v Great Yarmouth BC | Unique contractual rights |
| Co-operative Insurance v Argyll Stores | Supervision limitation |
Specific Restitution
| Case | Principle |
|---|---|
| Nutbrown v Thornton | Recovery of specific property |
| Duke of Somerset v Cookson | Unique goods |
| Re Wait | Property must be identifiable |
Rescission
| Case | Principle |
|---|---|
| Car & Universal Finance v Caldwell | Effective rescission |
| Clough v LNWR | Rescission restores parties |
| Erlanger v New Sombrero | Equitable rescission |
| Long v Lloyd | Affirmation bar |
| Leaf v International Galleries | Lapse of time bar |
| Phillips v Brooks | Third-party rights bar |
Injunction
| Case | Principle |
|---|---|
| Lumley v Wagner | Negative covenants |
| Warner Bros v Nelson | Preventing contractual breach |
| Redland Bricks v Morris | Mandatory injunctions |
| American Cyanamid v Ethicon | Interlocutory injunction test |
Core Examination Principles
| Remedy | Core Principle |
|---|---|
| Specific Performance | Ordered where damages inadequate |
| Specific Restitution | Returns specific identifiable property |
| Rescission | Unwinds the contract and restores parties |
| Injunction | Prevents or compels conduct to protect contractual rights |
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course
Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total Personal A Grades, 7 Distinctions and 11 World Records For Educate A Change A Level Law Full Scale Course