Specific Performance 2v3a24

Specific performance This is an order of the court for the party in default to carry out his obligations under the contract. For example, an order of the court that property should be handed over or title to the property transferred. As a remedy, it is rarely granted because of the difficulty in overseeing it. Specific performance is therefore subject to certain principles: 1. Not available where damages appropriate Falcke v Gray [1851]: A lady sold a pair of Chinese vases to an antique dealer for L. 20 each. Before delivery, she began to have her doubts about the real value of the vases so she asked another dealer for a valuation. He offered L. 200 for the vases. The lady accepted the offer and the second antique dealer took the vases away. The first dealer sued, claiming for specific performance against the lady and that the second dealer be ordered to hand the Chinese vases over to him. It was held that the claimant was only entitled to damages. In fact, despite damages not being an adequate remedy (goods unique and rare), the claimant was not entitled to specific performance because he had not behaved fairly, as he knew that the price of L. 20 for each vase was grossly inadequate. The lady was not an expert, so the two parties were not on an equal footing.

Société des Industries Métallurgiques SA v Bronx Engineering Co. Ltd. [1975]: Buyer ordered machine from seller. Dispute occurred – seller attempted to treat contract as though it had ended. Buyer tried to prevent seller from reselling machine abroad – could obtain substitute machine, but only after 9-12 month delay. Ct. held that, because substitute could be acquired, damages were adequate. The 9-12 month delay did not prevent them from coming to this conclusion. 2. Not contracts for personal services Warner Bros Pictures Inc. v Nelson [1937]: Bette Davis was contracted to work in films exclusively for the claimant. Went to England and wanted to act in a film for another company. Warner Bros sought injunction. It would have been impossible for them to secure an order of specific performance, which could not have been effectively enforced by the Ct. in any case. Ct. allowed injunction, since the order was to restrain her from taking up the alternative employment.

Page One Records v Britton [1968]: „The Troggs‟ were bound indefinitely to their manager, through a clause that they would not at any time appoint anybody else to act as their manager. Group grew disillusioned – found a new manager. Existing manager tried to enforce the contract by means of injunction, but failed. Ct. would not grant such an order – effect would be to tie the group to their manager indefinitely and against their will, or, otherwise, to prevent them from working as musicians.

3. Not where supervision is required Posner v Scott-Lewis [1987]: Landlord of flats was in breach of his obligation to provide a hall porter. The landlord argued that the remedy was inappropriate, since he had employed a non-resident porter. Ct. had no problem in awarding specific performance, since the tenancy agreement specifically required a resident porter. Had the landlord not complied with the order of the court, he would have been in contempt of court. 4. Discretionary Patel v Ali [1984]: A vendor of a house became disabled after the sale. If she went through with the sale she would have lost the house. The buyer of the house demanded specific performance to convey the property. Goulding J refused to grant specific performance, and granted only damages. As a discretionary, equitable remedy, specific performance was refused on the ground that considerable hardship would be caused. 5. Sale of consumer goods Sale of Goods Act 1979 (as amended by Sale of Supply of Goods to Consumer Regulations 2002):  Section 48A If buyer is dealing as consumer, and the goods do not conform to the contract of sale at the time of delivery, he has the right to: - Have the goods repaired or replaced (48B) - Have the price reduced appropriately (48C) - Have the contract rescinded (48C)  Section 48B If buyer requires repair/replacement: - Must be done within a reasonable time, but without causing significant inconvenience to the buyer (48b(2)(a)).; R.T. and S.I.: to be determined by reference to the nature of the goods and the purpose for which the goods were acquired. - Seller must bear any necessary costs incurred in doing so (labour, materials, postage). 48b(3) Buyer must not require seller to repair/replace goods if it is: - Impossible - Disproportionate compared to other remedies (including reduction and rescission). I.e., imposing of costs on the seller that are unreasonable.  Section 48C Buyer may have price reduced or contract rescinded if: - 48b(3) is not met (i.e., it is not impossible or disproportionate). - The buyer has requested repair/replacement, but the seller is in breach of 48b(2)(a).  Section 48E (2) “On the application of the buyer, the court may make an order requiring specific performance”.

Injunctions

Injunctions are of two main types:  Mandatory: where the order of the court is for the party to actually do something; These are rarely granted, as they impose positive obligations, and are hard for the court to enforce.  Prohibitory: where the order is for the party to refrain from doing something; These prevent the breach of a legal or equitable right. Injunctions may also vary as to the relief they offer. They can be:  Perpetual (permanent): the remedy in itself is a final remedy – „final relief‟  Interim (interlocutory): these are granted in advance of any trial of the issue to retain the status quo. Perpetual injunctions should be distinguished from interim:  Perpetual injunctions would settle the dispute – so they are only granted where damages in any case would be an inadequate remedy.  Interim injunctions are granted where the claimant might suffer irreparable harm if forced to wait for the main action, so they are granted to prevent the breach continuing until the wider issue is resolved at trial – but only subject to stringent safeguards, since the defendant also needs protection. Three common instances where an injunction may be claimed in respect of a dispute over contract law issues:  To enforce a restraint of trade by which one party is bound  To restrain a breach of confidence by one party to the contract  To encourage performance of a contract of personal services Cooperative Insurance Society Ltd. v Argyll Stores (Holding) Ltd. [1998]: Argyll operated a supermarket in a large unit that they leased in the claimants‟ retail centre. The lease had a covenant that required the supermarket to be open during normal business hours, but it became unprofitable for Argyll and they ceased trading. Coop feared that this would have an adverse impact on the level of trade in the retail centre, so they sought an order of specific performance to compel the defendants to reopen the supermarket. HoL held that it was unpractical for the courts to force Argyll to carry out their business, as it would need constant supervision by the courts to ensure compliance. Moreover, given that the defendants ceased trading for economic reasons, specific performance would place them in the position of either running an unprofitable business or, if defied, paying damages for contempt of the court.

Action for the price Sale of Goods Act 1979, Section (49):  If property has ed to buyer, but he wrongfully neglects or refuses to pay for the goods according to the contract, the seller may maintain an action for the price of the goods.  If the price is payable on a certain day – irrespective of delivery – and the buyer wrongfully neglects or refuses to pay, the seller may maintain an action for the price of the goods. Section (50):  Where buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.  The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer‟s breach of contract.  Where there is available market, measure of damages to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the time of the refusal to accept.

White & Carter v McGregor [1962]: One party was contracted to supply litterbins for a local council. The bins were to be paid for from advertising revenue, from businesses that would have ments placed on the bins for a three-year period. One of these businesses backed out of the agreement before the bins had actually been prepared. The suppliers nevertheless prepared the advertising and continued to use it for the whole period of the contract. He then sued successfully for the full price. Ct. held that he was not bound to end his own obligations merely because the other party‟s had been breached.