Remedies in the Law of Contract - Case Study Example

Case Advice to Rachel (The Client) By the Specter and Ross Solicitors LLP

A contract is an agreement between two or more parties and the court has a mandate to enforce it. The contracts whether implied or expressed in writing legally bind the two parties and have legal implication (Yates, 1976 p. 205). There are several cases where the contracts are not adhered to by a party or more. The situation is; therefore, a breach which means that the prior sets of agreements are not kept as per the contract. These breaches calls for a legal cause of action and must be claimed by the party that is injured. Breach of contract whether could have been avoided or not can lead to very serious consequences (Walker-Smith, and Close, 1953 p.8). The injured party can seek for remedies through claiming damages, penalty, mitigation, advance payments, repudiation, and suit for particular performance among others.

Part A

Rachel Markle, a mobile dog grooming business person entered into a contractual agreement with Louis, a local builder who was to install a dog grooming equipment in her car. Contracts require that the contract preconditions are satisfied; offer, acceptance, degree and value consideration, certainty or authenticity, and the intention to create legal relations (Andrews, 2015 p. 65). Either through expression or implication, the contracted party and the person contracting needs to follow the requirements of these preconditions to the latter. Otherwise, the contract is regarded as breached and demands certain remedies. From the British common law, contract remedies can be through liquidated damages, rescission, repudiation, injunction, restitutionary awards, and suit for particular performance (Atherton, 1994 p. 31).

As per the report given by Rachel, remedy through damages can be suggested. In terms of remedies, Rachel may demand claims from Louis because the breach he caused her to lose a cost of £250 in the unattended Pet City 2017 fair, £1000 from 20 lost bookings, and 10 missed appointments worth £500. It is suggested that these losses gives a secondary obligation to Louis to pay for the damages. The same principle was applied in the case of Hoenig v Isaac (1952)5, however, it was first decided in Cutter v Powell (1795), where the judges held that the entire duty stipulated in the contract goes hand in has with substantial performance (Burton, 1980 p. 372). Another suggestion for Rachel would be compensatory damages. This damage result by claiming losses due to contract breach. Damages are in this case assessed as per the normal principles. It would imply that the contract breaker gives a sum of money that would put the claimant in the position she was in before the contract.

Another available option for Rachel is to demand for the penalty in the court of law. However, in the event the loss she suffered is more than the penalty, she could disregard the penalty clause and demand for the actual loss she incurred. A case that used similar principle is that of Wall v Rederiaktiebolaget Luggade (1915) where it was held that the ship owner could abolish a penalty clause option and sues for the losses he suffered where the damages exceeded the amount of penalty (Farnsworth, 1970 p. 153).

The engagement of Rachel with the New Forest is another contract and had nothing to do with the engagement with Louis. Application for the services, response for the same and prior agreements indicates that the contract was a new one other than that of Louis. The disappointments Rachel and her fiancé encounter are as a result of a contract breach by the New Forest Management. She had an option of avoiding the disappointments in the SPA would she not requested for their services. However, the recreation company may be held liable for the breach of contracts agreed upon with Rachel. The claims can exist as per the various damage heads which can be claimed for different types of losses. These can be through bargain, discomfort or disappointment, diminution of future prospect, liquidated damages, inconvenience, and reliance loss.

Rachel can demand for compensation due to inconvenience, disappointments and discomfort. These can be experienced in holiday centers which fail to meet the expectations of the tourists in terms of meals or entertainment. It could be suggested that Rachel claims for her discomfort because she bargained for the enjoyment at the SPA, booked tour guide and ordered for good meals, all of which were not provided as it was expected. In Jarvis v Swan Tours, 1972, the court ruled that where a person enters a contract for a specific reason, such as for the enjoyment and entertainment, damages may be awarded for distress, frustration, disappointment and upset caused by the breach of the agreement in failing to reach the standards promised (Treitel, 1988 p. 42).

It can also be claimed that while Rachel may need to be compensated by the New Forest, the same cannot be extended to her fiancé, Mike, because he was not party to the contract. This exception is due to the rule of exception in the breach of contract based on Beswick v Beswick, 1968.

As the remedies in the law of contract demand, the situation of Rachel v Louis may be viewed substantial, especially when the money she was supposed to make would the contract have not been delayed is regarded (Treitel, 1988 p. 97). In light of this view, substantial performance would be advised. This was initially decided as per the ruling in Cutter v Powell, 1795. The client should be compensated for the quantifiable amount of money caused by the delay (Bishop, 1985 p. 300; Treitel, 1988 p. 102). It is upon Louis to compensate Rachel the amount of money she loses due to the delay caused by him.

On the other hand, Louis should be reliable for the non-substantial damage that is also caused as a result of the delay in completing the contract. The fact that the DoggyHeaven stopped the supply because of the cancelled orders by Rachel may not be quantifiable but regarded as loss. This is the second contract between the DoggyHeaven and Rachel. However associated with the contract with Louis, these frustrations are regarded as entirely due to the agreement between Rachel and the dog grooming company. The company terminated the contract because of the disappointment from Rachel who cancelled the orders.

The contract that binds is only the written and implied contracts between the two engaging parties. Therefore, the situation in the New Forest and cancellation of contract does not apply to Louis. As already seen before, the damage that Louis is entitled is that which was implied, that is, the Pet City Event and the bookings profits. Nevertheless, Louis may be required to pay additional fee for the frustrations experienced by Rachel. These may be regarded as punitive damages, where the court may require Louis to pay a certain fee as damages so that it would deter him from repeating similar mistakes. The courts normally award these damages in contract cases where both parties set prior agreements at the start of the contract. Also, Rachel may demand for compensatory damages because of the situation Louis has put her in. She suffers the likelihood to lose earnings in the future because of the breach.

In Hadley v Baxendale, 1854, delivery of parts broken delayed by several days and this caused a contract breach because the injuring party did not communicate the likely circumstances in time (Perloff, 1981). The general rule demanded that the damage be compensated as per the consequential damage. In the similar way, the Rachel can demand the losses she incurred due to delayed contract of the agreement between her and Louis.

Part B

If Rachel had a written contract with the expression: “If Louis Curtis fails to complete the van conversion by 15 May as agreed, he will pay a sum of £500 for every week or part week of the delay by way of liquidated damages” (this would give Rachel a sum of £1,500)?, the best approach would be to demand for damages as stated in the written agreement. The immediate loss that Rachel experienced after the breach was £1,250. Absence of written contract would imply that Louis is to pay the amount he caused Rachel to lose. However, because of the written contract is a legal agreement with the evidence and is even arising to a higher compensation, it would be wise for Rachel to demand for the compensation as per the written agreement between them.

Suit for particular performance in the contract breach may be recommended to Rachel because her monetary damage may not be adequate, especially, following the warning that she received from the DoggyHeaven Company (the grooming products supplier) that they are stopping their services following the disappointment due to the cancellation of the first orders by Rachel (informed by the delayed van installation). For this damage, the court may consider charging more fine from Louis. Specific performance is a discretionary remedy, and may not be issued where damages provides enough remedy or where there is uncertainty of contract or where there is a delay. However, this approach (suit for specific performance) would compel Louis to perform what the agreement demanded him to do. This is where instead of seeking for damages, the court may held that the amount of £1,500 be issued to Rachel as per the stipulation in the contract.

When the option of suit for particular performance is chosen for remedies, the party that breaks the contract should be taken to the court, and the plaintiff requests that the court orders the plaintiff to perform the agreements as per the contract. However, if there is likelihood for awarding Rachel for damages, the court is unlikely to apply this option. In Nutbrown v Thornton (1805) the court granted specific performance because while an award was possible for non-delivery of goods, it would be inadequate in compensation to the claimant, since there would not be any other place to buy goods from elsewhere (Treitel, 2003 p. 85). In the same way, the only supply for the quality dog grooming products was the DoggyHeaven which now refuses to supply its products henceforth. This was a great loss that required a punitive damage from Louis.