copyright guy harley 2008 1 revision. copyright guy harley 2008 2 types of remedy termination ...

1Copyright Guy Harley 2008

Revision


Types of Remedy

Termination Rescission Recovery of Contract Price Damages Equitable Remedies

Specific Performance Injunction Rectification Restitution


Damages

2 Types Liquidated Damages Unliquidated damages


Agreed Damages

The contract may provide for agreed damages Agreed damages must be a genuine pre-

estimate of damages Courts will not enforce a penalty


Penalty

An agreed damages clause will be a penalty if It is extravagant Where breach is failure to pay money and

clause provides for a greater payment Applies to several different types of breach


Unliquidated Damages

The amount of damages should place the innocent party in the same position that he would have been in had the contract been properly performed

Damages can include Expectation loses Personal injuries Disappointment, distress and discomfort


Damages for Disappointment etc

Courts have been reluctant to award damages for disappointment, distress and injured feelings

Not awarded for breach of most commercial contracts

Two cases where may be awarded; Distress flows from physical inconvenience Where enjoyment or entertainment or freedom

from molestation is an essential feature of the bargain


Remoteness of Damage (cont.)

A two part test Losses that flow ”according to the usual course

of things” from the breach Losses within the actual contemplation of the

parties at the time the contract was made


Mitigation of Damages

Plaintiff has a duty to mitigate losses Cannot claim losses which could have been

reduced or avoided by the taking of reasonable steps


Specific Performance

Court orders a party to carry out their contractual obligations

Not available if: Damages would be an adequate remedy Court has to continually monitor performance Used to enforce a contract for personal

services Against a minor


Injunction

Court orders a party to a contract to refrain from breaching their contractual duty

Not available if damages would be an adequate remedy


Quantum Meruit

Where one party requests goods and\or services without specifying a price

Implied promise to pay a reasonable amount Need not show loss by plaintiff only benefit by

defendant Applies where

Contract formed but no agreed price Partial performance of a contract has been

accepted Contract is void Contract is breached


Agency


Agency - Definition

An agent Has legal authority To affect the legal rights and obligations Of the principal In dealings with third parties


Agency - Requirement

A person cannot always act personally Agencies are usually created for the making of

contracts in commercial situations It is a fiduciary relationship


Agency - Contracts

Two contracts Between agent & principal Between Principal and Third Party

A principal is liable for the acts of an agent that are committed within his authority


Types of Agent

Universal Agent Can enter into all contracts on behalf of

principal General Agent

Agent has usual authority of someone in that position in that trade

Special Agent Given instructions to carry out a specific task


Types of Agency

Actual agency Express Implied

Agency by Necessity Apparent Agency (Ostensible agency) Agency by Ratification


Agency by Necessity

Agency arises in an emergency situation Three requirements

Agent is legally in possession of Principal’s property

Immediate action is required to avoid loss Agent is unable to communicate with Principal

to obtain instructions Springer v Great Western Railway Great Northern Railway v Swaffield


Apparent\Ostensible Authority

Agent has no actual authority but Principal’s actions lead Third Party to believe that Agent has authority

4 conditions A representation made by Principal to Third

Party No actual authority Third Part is induced to enter into contract Principal had capacity to enter contract


Apparent\Ostensible Authority

Tooth v Laws Derham v AMEV


Agency by Ratification

Agent does not have authority Principal later ratifies (i.e. authorises) agent’s

actions


Agency by Ratification - Requirements

Agent expressly contracts on behalf of Principal Keighley Maxstead v Durant

Principal must be in existence at time of contract Principal must have capacity at time of

ratification Principal must act within reasonable time Contract must not be void Whole contract must be ratified

Langlands v Worthington Ratification must be retrospective


Duties of Agent

To follow Principal’s instructions To use reasonable care & skill Not to make a secret profit Not to disclose confidential information To keep proper accounts

Breach of duty = breach of contract


To Use Reasonable Care & Skill

Where paid must use the skill & competence of a reasonable agent in the same trade

Mitor Investments v General Accident Fire & Life


Not to Make a Secret Profit

Agent must not take advantage of position to obtain extra benefit from Third Party of which Principal is not aware

Reiger v Campbell-Stuart


Not to Disclose Confidential Information

Fiduciary relationship Duty to disclose facts material to Principal’s

decision to contract with Third Party Must act in Principal’s best interests


Keep Proper Accounts

Money received on behalf of Principal must be held in a separate account (trust account)


Rights of Agent

Right to Remuneration Paid agreed amount If no agreed amount then what is reasonable

Right to indemnity Principal must reimburse expenses

reasonably incurred Principal must pay any claims against agent

Right to a Lien


Liens

Particular Possessory Lien Where Agent has purchased goods on behalf

of Principal Can retain goods until Principal pays for them

General Possessory Lien Agent can retain any of Principal’s goods in

Agent’s possession until paid


Third Party’s Rights

Can take action against Agent where Agent has no actual authority (breach of warranty of authority)

If Agent has not disclosed agency, can take action against Agent under contract

If Agent has disclosed agency, can only take action against Principal under contract

Can always take action against Principal both in contract and tort


Independent Contractors

Independent Contract acts on own behalf but does work for “Principal” International Harvester v Carrigan’s Hazeldene

Person hiring independent contractor is not liable for their actions

Two contracts between independent contractor and Third Party “principal” and independent contractor

Use of the word “agent” is not conclusive Potter v Customs & Excise Commissioners


Indicators of agency

Who keeps the profits and bears losses? Who provides office, staff, tools etc? Who decides when, where and how work is

carried out? Is the agent paid a commission? Does agent receive money on behalf of the

principal Does agent pay money on behalf of the principal Is agent authorised to make representations for

which the principal will be responsible Is the agent required to account to the principal?

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