Deck 14: Specific and Agreed Remedies

Question 1

An action for the agreed sum is the most common claim brought for breach of contract. Although it is a monetary claim, it is distinguishable from a damages claim for breach of contract in several ways. Which of the following statements is false?

A) The claimant for the agreed sum need not prove any loss caused by the contract breaker's breach, only that he has not received payment.
B) The remoteness limit is irrelevant to the innocent party's claim for the agreed sum.
C) The innocent parties' failure to mitigate is irrelevant to his claim for the agreed sum.
D) An innocent party cannot claim damages for breach of contract in addition to the agreed sum.

Answer 1

D

Question 2

Specific performance is a secondary remedy and will normally be awarded only in exceptional circumstances. The granting of specific performance is at the discretion of the courts. This discretion, however, is not unfettered and it is possible to state the well-established considerations upon which it is based. The courts recognize a number of bars to granting a claim of specific performance. Which of the following statements is false?

A) Specific performance is always barred by the innocent party's termination of the contract.
B) Specific performance is always barred where performance is physically impossible.
C) Specific performance is always barred where performance involves a continuous act, such as keeping a shop open.
D) Specific performance can be barred through delay.

Answer 2

C

Question 3

In which of the following situations will specific performance be granted?

A) Albert orders 200 tonnes of grain from Ben. Because Ben has not been paying his suppliers as of late they refuse to deliver to him. Ben informs Albert he cannot perform the contract.
B) Alan fails to show up for work at his computer programming job and his boss, Bernard, requests his attendance in order to finish a big order.
C) Anglo Industries is the sole producer of aminobutanol in Europe. They have concluded a five year supply contract with Britishcare, which uses the product for the production of vaccines. In the third year of the contract, Anglo decides to manufacture vaccines as well and refuses to supply Britishcare for the remaining two years. The only other supplier of aminobutanol is in Japan and they have no extra capacity to supply Britishcare
D) Alice owns an exotic pet shop. She orders a rare Melanesian finch for one of her customers from Bob, who owns an animal import business. Because of a new law banning the import of Melanesian Finches, Bob cannot deliver the finch to Alice.

Answer 3

C

Question 4

Which of the following statements is true?
I)If parties agree to a clause which specifies a sum payable by the contract breaker in the event of breach, the innocent party is barred from seeking specific performance.
II)If the parties agree to a clause which specifies that specific performance will be awarded in the event of breach, the court must award specific performance.

A) Both I and II.
B) Only I.
C) Only II.
D) Neither I nor II.

Question 5

Clauses which determine the sum payable by the contract breaker in the event of breach are only enforceable if the sum stipulated is a genuine pre-estimate of the loss likely to be caused by the breach.

Question 6

Harold agrees to sell his business to Denise for £10 million. The contract specifies that Denise must pay a deposit of £5 million and that the balance must be tendered by 17 November. According to well-established custom in sale of land contracts, a 10% deposit is considered reasonable. Denise pays the £5 million deposit, but is unable to secure a loan to cover the balance from her bank. She finds another lending institution which is willing to help, but can only tender the balance of the contract price by 18 November. Harold terminates the contract for Denise's late tender. How much of the deposit can Harold retain?

A) All of it (£5 million).
B) 10% of the contract price (£1 million).
C) A reasonable sum determined by the courts.
D) None of it.