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Published: Fri, 02 Feb 2018
Three remedies available for breach of contract
When establishing a contract, it is important that to include the element such as legality, consideration, certainty, and agreement in the contract. This is because all of these elements will help in enforcing the contract to be valid. Besides that, when there is problem arise between two parties whom had sign the contract, it will help to protect the parties from encounter losses. There are some cases that happened where one of the parties were failed to keep his or hers promises that has stated in the contract, and this situation is known as breaching of contract. The cases of breaching a contract can be many reasons, such as nature disaster, government regulation, and so on. Apart from that, some of the cases for breaching a contract are unavoidable. For example, when a hotel had buy in fish for a banquet purpose, but suddenly tsunami had happened and because the supply of fish is being cut off. As a result, the hotel can’t provide the fish for the banquet, and the contract to provide the fish for the banquet is breach. This is known as the breach of contract that is can’t be avoidable, and it will cause the hotel to loss of customer goodwill.
2.2 Three remedies available for breach of contract
When one of the parties that had breaks the term and condition that had been agree by two parties in the contract, breaching of a contract is happened. By this, the other parties can voice out to pursue for remedies in order to cover the losses that is faced by him or her. There are three type of remedies which the plaintiff (person who brings an action in a court) which are damages, specific performance and injunction. These remedies will be given to the plaintiff according to the losses that he or she had faced.
According to Section 74, Contract Act had stated that when one of the parties has encountered losses or injury due to the breach of contract, damages are granted to him or her as compensation. Besides that, penalty is often applied to the contract as if the term and condition of the contract are not reached on the date that has been set. Usually, the court will set the penalty that the defendant needed to give to the plaintiff is in money form. For example, when a supplier had agreed to supply a product to the hotel, the penalty might already being negotiate and agreed by both the supplier and the hotel. From that, the penalty will be applied into the contract. So, if the supplier failed to supply the product on time, the penalty will be applied to the supplier. Apart from that, there is also few type of damages that we can found due to the breaching of the contract. In tort law, there are two types of damages which are general damages and special damages. General damages are usually refers to damages such as lost of reputation, life expectancy and so on. While for special damages, it means that the defendant facing with money problem that lead to the property or injury loss faced by the plaintiff. It usually include expenses in medical area, lost of wages and repair cost.
b) Specific Performance
In this type of remedies, it is more on performance action than monetary form. Under the Specific Relief Act, the specific performance might be applied to the contract and the compensation of monetary is inadequate. In other word, specific performance means that when one of the parties had breach the contract, the another parties can request the court related to force the parties that had breach the contract to perform the term and condition that is stated in the contract. For example, when a person had sign a contract with the hotel that he or she will perform the action that is stated in the contract. If the person refuses to do what have been stated in the contract, the hotel can bring the contract to the court related and request the person to perform the action in the contract stated. However, there is some condition where specific performance cannot be carry out, such as the specific performance will cause the parties who had breach the contract to faced with hard time. Besides that, specific performance also cannot be carry out if the contract are not clearly stated what should be done. This will lead to the contract cannot be enforce when one of the parties had breach the contract. Specific performance that are impossible are also cannot be carry out when the person had breach the contract.
In this option, injunction can be said as a remedy that is equitable that the court requires the party to do something or the other way, to stop him or her from doing something. There are three types of injunction which is interlocutory injunction, mandatory injunction and also prohibitory injunction. The meaning of interlocutory injunction can be say as to maintain the status quo of something in a pending suit. In the other word, interlocutory injunction means to stop the action from being done. Interlocutory injunction is applied in before the starting of something or stops something for being continued. For example, when there is two people are fighting for the ownership of a hotel, interlocutory injunction is applied to this case. While for mandatory injunction, it means that the court enforce something or some action to be done. In other word, when one of the parties refuse to do the promises that had stated in the contract, the other parties can request the court to apply the mandatory injunction on the parties to finish the action. For example, when a contractor refuses to finish building the hotel new property on the date given, the hotel can request the court to apply the mandatory injunction to the contractor to finish the work. For prohibitory injunction, it can be define as to stop something or some action from being done. When the two parties had sign a contract, and one of the parties decided to sign the same contract with others, the other parties can request the court to apply the prohibitory injunction to the parties that want to sign the other contract. For example, when a contractor had decided to sign a contract with hotel A, but on the other hand, the contractor also wants to sign a contract with hotel B. As a result, hotel A can request to apply prohibitory injunction to the contractor from signing contract with hotel B.
As conclusion, when both of the parties had signed a contract, it is encourage that both of the parties not to breach the contract. This is because when breaching the contract, it not only brings in monetary problem, but also will losing of confidence when signing a contract. So it is necessary that to take a careful consideration and decision before signing a contract with others. When establishing a contract, it is encourage for the person that wanted to have cooperation with other to set up the contract in a writing document. Besides that, after him or her setting up the contract, it is also necessary that both of the parties to read through the contract carefully. This is because to prevent that one of the parties are not satisfied with the term and condition in the contract after the agreement. After had sign the contract, it is also encourage to keep a copies of the contract document. Not only that, it is need to state the time deadliness for the performance in the contract. These methods can be help in preventing from one of the parties breaching a contract.
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