1. Lesson 7 : Remedies of Breach of
Contract
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2. REMEDIES FOR BREACH OF
CONTRACT
1. Introduction
2. Damages
3. Quantum Meriut
4. Specific Performance
5. Injunction
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3. 1. INTRODUCTION
• When one party breaches a contract, the
other party is entitled to be compensated
for that breach. This compensation is
called the remedy. The nature of the
compensation depends on numerous
factors such as:-
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4. a. the nature of the contract.
b. the nature of the breach
c. the extent of damages caused etc.
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5. • Remedies for breach of a contract are not
meant to punish the party in breach. It is
meant to put the parties in a position they
would have been if the contract had been
performed.
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6. 3. DAMAGES
• Damages are a form of monetary compensation
and are a common law remedy available to the
plaintiffs as of right. The purpose of damages is to
compensate the injured party for losses suffered.
The amount of damages awarded would depend
on the facts of the case itself.
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7. a. Liquidated Damages
• Sometimes the parties to a contract specify in the contract a
fixed amount that is to be paid in the event of a breach of
contract. This is known as an agreed damages clause. It is
very common to have this clause in a building contract or a
contract which is time sensitive where the parties agree that if
the party who is to carry out the work is in delay, the other
party would be entitled to claim S$X/day as liquidated
damages.
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8. • The advantage of liquidated damages or
agreed damages is that there is no need to
prove the actual monetary value of the losses
i.e. General damages.
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9. • However, the liquidated damages must be
a genuine pre-estimate of the loss.. If it is
too high or unreasonable, it will be
considered to be a penalty and the law
does not allow penalty clauses. It is
against the principle of the law of contract
and such a clause will be struck down..
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10. b. Mitigation
• Even though the party in breach is to
compensate the injured party, the injured
party as a duty to ensure that he takes
steps to minimise the loss caused by the
breach. This is called mitigation of loss.
The injured party must take reasonable
steps to reduce his loss once the other
party has breached the contract.
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11. • If the injured party does not mitigate his
loss, the court making the award of the
damages may reduce his claim for
damages..
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12. EQUITABLE REMEDIES:
a. Quantum Meruit
• The Latin expression quantum meruit means “as
much as he has earned”.
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13. • Some of these examples are:
i. where work has been done under a contract
which does not specify the price;
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14. ii. where some work had been done by one
party under a contract which was repudiated
by the defendant;
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15. iii. where work was done by one party and
accepted by another under a contract later
discovered to be void;
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16. iv.where there was part performance of a
contract (not amounting to substantial
performance) by one party which was
voluntarily accepted by the other;
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17. v. where the contract is frustrated but the other
party has enjoyed a valuable benefit.
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18. b. Specific Performance
• This is a remedy where the court will order one
person to perform his contractual obligations.
This is quite rare and it is not as off right. It is a
remedy, which would not be granted in a
situation:-
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19. i. where damages are an adequate remedy;
ii. where the contract breached is one involving
personal services;
iii. where the performance of the contract would
require the constant supervision of the court.
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20. c. Injunction
– This is an order of court restraining a person from
breaching his contract. Like specific performance, it
is an equitable remedy and is granted only in
circumstances where the court thinks it is fair and
reasonable to do so. It is not available as of right.
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21. d. Limitation Act
– If one party breaches the contract, the other party
must commence an action within six(6) years from the
date of the breach. This is called the ‘limitation
period’ and it is stipulated by the Limitation Act (Cap
163).
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22. – If the action is not brought within six years it will be
time barred and the injured party will have lost his
right to claim.
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23. – Once the action is started, it does not matter how long
it takes before the dispute is resolved.
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