Lecture 9 notes on Business Law
Lecture 9 notes on Business Law
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This 23 page Class Notes was uploaded by Jade Notetaker on Saturday October 10, 2015. The Class Notes belongs to at Nanyang Polytechnic taught by in Fall 2014. Since its upload, it has received 14 views. For similar materials see Business Law in Business at Nanyang Polytechnic.
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Date Created: 10/10/15
Business Law BMO742 AY2014 Semester 1 Lecture 9 Remedies Remedies An Remedies What the court awards OVE rview the injured party Common Law Equntable Remedies Remedies Discretionary A5 of right Sped c In39unctions Rescission Dama es Quantum Performance J g Meruit Prohibitory L Mandatory Damagg Monetary compensation awarded to injured party for breach of contract 3 Categories of Damagg Damages for pecuniary losses Damages for nonpecuniary losses Liquidated Damages Damages for Pecuniary Losses Compensation for monetary losses Eg loss of profits wasted expenses cost of rectifying defects Generally can be recovered Damages for NonPecuniary Lss Damages for NonPecuniary Losses NonPecuniary Loss Not a direct monetary loss Examples mental distress disappointment General Rule Contract law does NOT allow claims for nonpecuniary losses Exception Where main object of contract is to provide enjoyment pleasure or comfort Eg Contract with tour agency to provide a holiday se 5 ment of Dama es The court will not order compensation for every loss suffered 2 important limitations Remoteness of damage Mitigation P cannot claim if loss is too remote ie not connected closely enough with the breach I General rule Natural and ordinary loss 9 D is liable Unusual or special losses 9 D not liable unless D aware of special circumstances and had agreed to supply goods services for that purpose Mitigation When there is a breach of contract plaintiff must take reasonable steps to try to minimise his loss Eg Seller fails to deliver goods Buyer should try to obtain a substitute from the market Eg Company charters a ship to deliver cargo but the shipowner fails to provide the ship Company should try to charter another ship to carry the cargo Liqui ate Damages Liquidated Damages Clause Term in the contract Fixes in advance sum payable in the event of a breach of contract A genuine preestimate of loss Effect of a Liquidated Damages Clause Plaintiff entitled to claim amount stated in LB Need not prove his actual loss Liquidated Damages Example of a LD clause Construction contract between XYZ Contractors and Company ABC states that If XYZ is 10 days late in completing the building what amount can ABC claim Liqui ate Damages A penalty clause Provides for payment of a sum of money much greater than the genuine preestimate of loss Purpose To punish party in breach of contract and to pressurize him Effect of penalty clause Court will not allow penalty to be recovered Plaintiff must prove his loss and court will fix amount of damages payable Liqui ate Damages Example of Penalty Clause X engagesY to paint his house for a fee of 200 The contract between X andY states In the event that Y fails to paint the house Y will payX 150000 as damages The cost of getting another painter to paint the house would be 250 IfY fails to paint the house can X claim 150000 based on what is stated in the contract Distinguishing 3 LD I a Penalty Dunlop Pneumatic Tyres Co v New Garage 1915 1 Describing amount as penalty or as liquidated damages not conclusive Court will look at the substance ofthe agreement 2 Ifamount to be paid is excessive and unreasonable compared to the biggest possible loss Probably a penalty 3 lfa single lump sum is payable regardless of how serious the breach is the sum is likely to be a penalty 4 fthere was a genuine attempt to estimate the loss beforehand amount payable will not be considered a penalty even if it was difficult to calculate the loss in advance Equitable Remedies I 3 types of equitable remedies 1 Specific Performance 2 Injunction 3 Rescission Hewe Seereh Wet Eeejeh Eleeei e eeeeh A een tiein Heme Delhrenj Hee er emieee Tirelt e St Heme New SpellTie Bueineee I 39IIpinien Enten teinment eeturee Eemmunityr F Eemmuriitfy39 News I Ereeiel Seehe I Ehewitiee Fund I H39tueriee 1 Birth I 12 tierie 1 Tue e I E quake Hep EFEHWEE et Fi39l u ied Wedmeedey Hearember ESL EIIIDEIE r 2 25 F39quot r r It the er Fen We ester gamma 7 r mm 3 Sentiment In er E I ing ellymeety leer H w tetehee teerue teerel matinee at h Hen euet ae Ely eeeciagtee Freee HUNG Fi HE F39s Eh hee 1 Amie hewl etihg them the neea re leee ee d ter39 51942 m ll eh et ee eh IZHI39ti TLIeed er39ee t he the eier39tel rm 1 I eriee few ing yneetgg eereu39h eeq Ehn39eti A etiri heeee eeiel u in eee re remit be M from title I37 centm f5 dietsfay A 1 A U 1 1 et39 shnetE39s eecztj39rl Lheuee in The feu39hulle re eejnie emIE ted eeeme Eileen Hag mag megaray me hemTye tren39h the eeem ef thee714 lehlhg wh 5E em km the ef reiagutieel them quot1 E393EEnte r r e ithe meet eaFlee NEE2 eeeeneive were t eu39t eeew ee d in 339 eeieh 915 55 5quot ij ig39t39g m39t39m v 1 1 m A ij me tehe weerquot weeure enle eu Etl 39th Ehnetle e eel El g WM mammal The eeWu e pert t e peir The F er he t ie CheerSEE tee e Heret et mueeum ih thjh r 39i quot mm39 m The Lereviue euetiri FEETE5ij ihgeer39ernjir y wee eet E33 e eheeeeht eeee wh eh teteheel 2 quot a HH J1 L Fl I N DEE 39 51435 m ll at tng w39 Eug in mi quot I ate mi iITiL L Lie eteher 2105 A a a 1 u 139 7 e I Etiii inquot W quot397 ti heee e li39leIIWgmed Emile DEM emien r 5 1 iMIME it 7 5 The EyeWu wee eele E33 hineee ee leetm Fieljert Gheeg te el ee Ehehg e Hung Heng Ellestem Ehn39etie39e eei v ific e rmance Specific Performance Court order Requires party in breach to do what he promised to do under the contract Granted when monetary damages are inadequate to compensate the plaintiff amp plaintiff prefers to have contract carried out Usually granted Contracts for the sale of rare items Contracts for the sale of land sale of a house I Usually NOT granted Contracts for personal service Contracts with continuing obligations that require constant supervision by the court I Orderfor SP must be followed otherwise defendant may be guilty of contempt of court andjaHed Injunctons Granted when party has promised NOT to do something in the contract Contract breaker has already carried out the act Mandatory Injunction 2 types of injunctions Prohibitory Injunction Mandatory Injunction Contract breaker has not yet carried out the act Prohibitory Injunction J In jun Prohibitory Injunction Court order Requires a person not to do something Appropriate when contract breaker intends to do something that he has promised not to do but has not actually done it yet Eg a court order which requires an employee not to compete with his eXemployer would be a prohibitory injunction Prohibitory Injunction Warner Bros Pictures v Nelson 1937 A film actress agreed with Warner Brothers that she would NOT work as an actress for anyone else during the period of her contract She made a contract with a third party to act in films Held Warner Bros Entitled to a prohibitory injunction Mandatory Injunction Mandatory Injunction Court order Requires party to do something to restore the situation to what it was before the breach eg to tear down a fence or demolish a building Appropriate when a party has promised in the contract NOT to do something but has already done what he is not supposed to do Mandatry Injunction Example X buys a piece of land fromY In the contract X promises not to build any fences on theland X builds a fence on the land Y can ask for mandatory injunction requiring Xto tear down fence The End
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