Professional Documents
Culture Documents
Introduction To Law: Law of Contract /agreement
Introduction To Law: Law of Contract /agreement
2. Specific performance
This is exact performance. The courts approach is
that a party who is willing and able to observe
the obligations on his part is also entitled to
expect the other party to perform- not surrogate
performance. In other exceptional circumstances
the court may decline to grant specific
performance.
Case: Farmers’ Cooperative Society Vs Berry 1912
REMEDIES FOR BREACH OF CONTRACT
• Situations where specific performance is not available:
• Where it is felt that damages can adequately remedy the
loss.
• Where the claim by creditor is easily available on the
market and is not a rare/unique/extraordinary commodity
• In contracts envisaged the rendering of personal
performance (marriage/employment)
• Where unreasonable hardship will be caused on the
debtor and the public
• Case:Haynes Vs Kingwilliamstown Municipality
Case on specific performance
• Case:Haynes Vs Kingwilliamstown Municipality
• Facts: The Kingwilliamstown Municipality was obliged
under a 1911 agreement to release to Mrs Haynes
250,000 gallons of water daily from its storage dam. This
agreement was fully carried out until 22 April 1949 when,
due to drought and in order to relieve the consequent
shortage of water plus concomitant threat to health in
Kingwilliamstown, Mrs Haynes water allocation was
reduced to between 1,500 and 2,000 gallons daily.
Although she had adequate water from other sources,
Mrs Haynes sued for specific performance.
Case on specific performance
• Case:Haynes Vs Kingwilliamstown Municipality
• Court: Against Mrs Haynes, because, although a
plaintiff has a right (which the defendant has
not) to choose between claiming specific
performance or damages and although the
court will as far as possible give effect to a
plaintiff's choice to claim specific performance,
it has a discretion in a fitting case to refuse to
decree specific performance
Case on specific performance
• Arty is an art dealer. He acquires a rare, ancient Egyptian statue
that is thought to have belonged to Cleopatra. Andrea collects
Egyptian art and makes a sizable offer to buy the piece. Arty
agrees, and the two make a valid legal contract.
• Arty then decides that he'd rather keep the piece for now. He
breaches his contract with Andrea. Andrea sues Arty for breach
of contract. The court decides that the piece is truly priceless,
and Andrea can't acquire another comparable piece no matter
how much money the court awards her. Instead, the court
decides that Arty should comply with the terms of the contract,
and sell the piece to Andrea for the price she already agreed to
pay. This is specific performance.
Case on specific performance
• Case: Farmers’ Cooperative Society Vs Berry 1912
• Facts: Berry- obliged as a member of the farmers
Cooperative Society to deliver his whole crop to the society
– nevertheless he refused to deliver a crop of 1,200 bags of
mealies as agreed. Consequently the society sued for
specific performance or alternatively –damages of $765,
being the computed additional cost to the society of
replacing the 1,200 bags through the open marketing order
to fulfil the society’s own contractual obligations to deliver
to various merchants. Though at the trial no damage was
shown to have actually been caused in this manner
Case on specific performance
• Case: Farmers’ Cooperative Society Vs Berry 1912
• Court: On appeal, that the Society had indeed failed to prove any portion of its
damages as laid.. But that only disposes of the alternative claims as framed ; the
question of whether specific performance should be decreed.. Still remains. In
which regard, the court ruled in favour of the Society and a grant of specific
performance, because basically, every party to a binding agreement who is ready
to carry out his own obligation under it has a right to demand from the other
party, so far as it is possible, a performance of his undertaking in terms of the
contract. It is true that courts will exercise discretion in determining whether or
not decrees of specific performance should be made. They will not of course be
issued where it is impossible for the defendant to comply with them. And there
are many cases where an award of damages can fully and conveniently do justice
between the parties. But that is a different thing from saying that a defendant
who has broken his undertaking has the option to purge his default by the
payment of money
REMEDIES FOR BREACH OF CONTRACT
3. Damages
Damages are the monetary equivalent of specific
performance. Courts would like to place the injured part in
a position that he would have occupied through the
payment of money and without hardship to the debtor.
Contractual damages emanate from breach of contract.
Delict damages emanate from situation where there is no
contract. The damages are not meant to punish the debtor
– they should not be vindictive. They are meant to place
the injured person on a position he would he occupied had
the contract been performed.
Types of Damages
• Expectation Damages: amount awarded based on the expected profit or
monetary benefit the plaintiff expected to receive
• Reliance Damages: monetary value of the time, effort, and expenditures
the plaintiff wasted in preparation for performance
• Account of profits : defendant ends up with a gain as a result of the
breach, plaintiff may sue for damages based on that gain
• Nominal Damages: neither a loss for the plaintiff nor a gain for the
• defendant,
• symbolic damages: may be awarded in very small amounts
• Liquidated Damages :amount of damages agreed to in advance by the
parties for breach of contract
• Punitive Damages :these damages are intended to punish the defendant
and discourage bad behaviour.
REMEDIES FOR BREACH OF CONTRACT
• General Guidelines in Assessing Appropriate
Damages
1. Damages must be direct
Courts insist damages should be direct not
indirect . Direct damages flow naturally from the
breach- they are not remote. Damages must be
within the contemplation of the parties so much
that a reasonable person would agree that the
damages are a direct consequence of the breach.
REMEDIES FOR BREACH OF CONTRACT
• General Guidelines in Assessing Appropriate
Damages
2. Mitigation of Losses
The injured part must mitigate his losses as a
reasonable person. He is expected to take practical
steps to curtail his losses eg a contractor relocates
else where before completes the contract- you would
naturally take steps to minimise loss. The debtor
should not take unreasonable/ extraordinary steps to
mitigate his damages
REMEDIES FOR BREACH OF CONTRACT
• General Guidelines in Assessing Appropriate
Damages
3. Avoid unjust enrichment
These setbacks are meant to ensure that the
injured party is overly paid and that the debtor
should not be unreasonably punished. Damages
are meant for patrimonial (quantifiable) loss
and not normally for sentimental loss.
Case on Damages
Smith, Hogg & Co v Black Sea Insurance (1940)