contract 17

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Beswick v Beswick (1968).: order for specific performance was made because it appeared to be the only remedy available Traditionally, an order for specific performance was only made when damages were an inadequate remedy.

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Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd (1997), owned the freehold of a shopping centre and they let the anchor unit to Argyll Stores as a supermarket, for 35 years from 1979, with a covenant to 'keep open the demised premises for retail trade'. In 1995, the store was making a loss and Argyll closed, despite the protests of the Coop. The Coop argued that they should be awarded specific performance, on the ground that it was necessary to keep a store open in an otherwise depressed area.: HL reluctant to extend the traditional ambit of an order for specific performance and clung rigidly to the old restrictions in its application. HL 1 it was settled practice that no order would make someone run a business. 2enormous losses would result from being forced to run a trade. 3 framing the order would be unduly difficult. 4 wasteful litigation over compliance could result. 5 it was oppressive to have to run a business under threat of contempt of court. 6 it was against the public interest to require a business to be run if compensation was a plausible alternative.

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Where damages were an adequate remedy, an order for specific performance would not be made: Cohen v Roche (1927).: the buyer was contracting with a view to resale and for personal use Hepplewhite chairs: of ordinary goods, damages are an adequate remedy. The damages allowed the injured party to purchase replacement goods in the market.

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Johnson v Agnew (1979).: damages for a breach of a contract to sell land are viewed as inadequate and the usual remedy in such a case is an order for specific performance: Another consideration in awarding specific performance is that in some cases it may be extremely difficult or impossible to quantify the claimant's loss: Decro-Wall International SA v Practitioners in Marketing Ltd (1971). a breach of contract does not automatically bring a contract to an end but rather, gives various options to party who is not in breach ('the innocent party').: Once the court has concluded that a "reasonable notice" requirement was to be implied into a contract, the question of what notice period was reasonable must be judged as at the time the notice was given. Buckley LJ also set out the test for fundamental breach, saying: "the . . breach must be such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract . . Will the consequences of the breach be such that it would be unfair to the injured party to hold him to the contract and leave him to his remedy in damages

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Decro-Wall International SA v Practitioners in Marketing Ltd (1971) DW were not to sell their goods in the United Kingdom to anyone other than PML, were to pay for the goods by bills of exchange due 90 days from invoice. It was an implied term of the contract that it was terminable by reasonable notice on either side. PML were successful in developing a market for the plaintiffs' goods and incurred heavy advertising expense. slow in meeting the bills of exchange payable for the goods which the plaintiffs supplied from time to time in response to the defendants' orders. most paid late The reason for the delays was the PML shortage of working capital. However, the plaintiffs never doubted the defendants' ability to meet their obligations, albeit late. DW wrote to the defendants in effect alleging that the defendants had wrongfully repudiated the contract of March 1967 by failing to pay bills on time and accept and terminate contract. They appointed S.L. sole concessionaires for the United Kingdom in place of the defendants. The plaintiffs sued for the amount of the unpaid bills and for goods sold The defendants also counterclaimed for damages for breach of contract.: held (1) that there had been no repudiation of the contract by the defendants in failing punctually to pay the bills of exchange and being unlikely to do so in the future,the defendants' breaches in that respect did not go to the root of the contract in that the practical consequences of the breaches did not justify that conclusion, so that the breaches sounded in damages only.

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specific performance and equity: since an order for specific performance is an equitable remedy, it is also a discretionary remedy. It does not follow as a matter of right; it is left to the discretion of the courts Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd (1998): 1. The claimant's conduct must be beyond question. clean hands. 2. if the party claiming the order has performed the contract in an unfair manner the order will be refused. 3. must be possible for D to comply 4. mutuality of remedy must be possible for both parties to in theory have a specific performance notice.Page One Records v Britton (1968). 5. not for certain contracts : services or employment.

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Page One Records v Britton (1968). mutuality of remedy needed for specific performance In 1966 the Troggs entered into a written agreement with Page One Records under which they appointed Page One Records to be their manager. The agreement which extended world-wide was to continue for a period of five years. It provided that during the period of agreement The Troggs would not 'engage any other person... to act as managers... for [The Troggs].' The agreement provided that The Troggs would pay the first plaintiff a sum representing 20% of all moneys received by The Troggs during the period of the agreement In 1967 Page One Records received a letter signed by each of The Troggs which purported to terminate the agreement. Page One Records sought (i) an injunction to restrain The Troggs from engaging a new manager; and (ii) an injunction to restrain The Troggs acting as a group from publishing any music.: Page One Records v Britton (1968). held that an injunction must be refused because to grant it would, in effect, compel The Troggs to continue to employ the plaintiff, and thus would amount to enforcing the performance of a contract for personal services. held (i) That specific performance is never granted to enforce a contract for personal services. (ii) That an injunction is never granted which would have the effect of preventing an employer discharging an agent who is in a fiduciary position vis-a -vis the employer. He emphasises that here the first plaintiff, as manager and agent of The Troggs, is in the position of an employee. (iii) That an injunction is never granted at the suit of the party against whom the party to be restrained could not obtain specific performance. It is urged - and, in my judgment, correctly - that The Troggs could have no action for specific performance of the management or agency agreements against the first plaintiff.

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Giles v Morris : no specific performance for service contracts: The reasons why the court is reluctant to decree specific performance of a contract for personal services (and I would regard it as a strong reluctance rather than a rule) are, I think, more complex and more firmly bottomed on human nature... who could say whether the imperfections of performance were natural or self-induced?!

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Giles v Morris: Giles v Morris The court will specifically enforce an agreement to execute a contract, even if that contract itself could not be specifically enforced. Quaere: Whether a perfected Chancery master's order can be discharged on motion. Per curiam: (1) An agreement will be specifically enforced if only a small part of it requires personal services. (2) The rule restricting specific enforcement of contracts requiring personal services requires reconsideration.

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Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd (1997) The Cooperative Insurance Society Ltd (CIS) owned the freehold of a shopping centre and they let the anchor unit to Argyll Stores as a supermarket, for 35 years from 1979, with a covenant to 'keep open the demised premises for retail trade'. In 1995, the store was making a loss and Argyll closed, despite the protests of the Coop. The Coop argued that they should be awarded specific performance, on the ground that it was necessary to keep a store open in an otherwise depressed area. The trial judge refused a specific performance order. The Court of Appeal granted specific performance by a majority, because there was considerable difficulty proving a loss suffered and Argyll had acted with 'unmitigated commercial cynicism'.: HL no specific performance when possile to resolve problem with damages. number of relevant considerations. First, it was settled practice that no order would make someone run a business. Second, enormous losses would result from being forced to run a trade. Third, framing the order would be unduly difficult. Fourth, wasteful litigation over compliance could result. Fifth, it was oppressive to have to run a business under threat of contempt of court. Sixth, it was against the public interest to require a business to be run if compensation was a plausible alternative.

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Why are damages not considered to be adequate compensation for the breach of a contract for the sale of land?: each land is considered to be unique =>damages not adequate no similar substitute is available. See Johnson v Agnew (1979). not an entirely satisfactory answer in the modern world, where parcels of land tend to be small and many residences are similar in their construction and aspect. The real problem may be that the market of similar substitutes is so small that it is impossible in practice to purchase a substitute: people tend not to sell houses in the way that they sell, for example, unavailability of a substitute because the market does not provide one. what may really be occurring here is that an order for specific performance is made because everyone involved expects that it will be made. In such circumstances, damages are not an adequate remedy because none of the parties ever expected such a remedy.

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Would an order for specific performance in a contract of services be tantamount to slavery?: It depends on what sort of contract the contract of services was. If the services could be performed by an agent or employee of the parties, then it is hard to see that it would be tantamount to slavery. In addition, in many cases, a modern employer will be enormous and employ vast numbers of people. In such a concern, personal elements will be more removed. In the case where the individual is required to perform their services to an individual or within a small organisation, the analogy to slavery may be more appropriate.

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Wroth v Tyler (1974) Claims for damages can be combined with claims for specific performance or injunction although it is generally unnecessary to resort to the special power to award damages in lieu of these remedies (s.49 Supreme Court Act 1981).: damages are made in substitution for specific performance and must 'constitute a true substitute for specific performance'. The damages awarded must provide as nearly as possible what specific performance of the contract would have provided.

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injunction Like an order for specific performance, an injunction is a discretionary remedy and a court will only order it where it is just to do so.: a party promises not to do something or to refrain from doing something. In this case, equity offers the possibility of an injunction by the court prohibiting some form of conduct. The court is enforcing a negative stipulation. An injunction is also a discretionary remedy. However, courts will generally order it as a matter of course.

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injuinction, will not be ordered when too hard on D Insurance Co v Lloyd's Syndicate [1995] the only document of which disclosure was sought was the arbitral award. The parties to the arbitration were the reassured and the leading reinsurance underwriter, who had acted together with a syndicate of five other reinsurers. The reinsurers had all denied liability for certain losses under the contract of reinsurance, and the reassured arbitrated its dispute against the first lead reinsurer first.: The arbitrator had found in favour of the reassured who then sought to disclose the award to the remaining five reinsurers on the basis that, to do so would be helpful in its negotiations with them to persuade them to accept liability. The lead reinsurer took out an application to injunct the reassured from making such a disclosure. The court accepted the test for confidentiality of an arbitral award established in Hassneh Insurance Co of Israel v Mew: that parties to an arbitration were obliged to keep an arbitral award confidential unless it was reasonably necessary for the establishment or protection of an arbitrating party's legal rights vis--vis a third party. The court held that it was not 'reasonably necessary' where disclosure was required because it was 'commercially helpful'. In this case, the disclosure of the award would not establish the legal position against the other reinsurers; at most, it was persuasive. court should be minded not to grant the injunction against the reassured as it was not established that disclosure would cause any damage to the lead reinsurer. The court held that the appropriate test in considering whether to grant such an injunction was not whether damage would be suffered if there was disclosure, instead it was whether some particular hardship would be caused by enforcement of the covenant of confidentiality that to enforce it would be unconscionable. In this case, the court held that the fact that the reassured would have to proceed separately against the other reinsurers was not sufficient to amount to an unconscionable hardship.

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Page One Records v Britton (1968): It is important to consider that a court will not grant an injunction where to do so would be to indirectly order specific performance In many cases, however, courts have refused to recognise that the grant of an injunction preventing the party from employment with another effectively compels them to specifically perform the first contract.Warner Bros v Nelson (1937): defendant was a person of 'intelligence, capacity, and means'. The grant of an injunction preventing her from acting for anyone other than the plaintiffs would not compel her to act for the plaintiffs

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Warren v Mendy (1989). Nigel Benn entered into an with Frank Warren whereby Warren was to act as Benn's manager for three years. Clause 4 of the agreement stated 'The boxer agrees and undertakes: (i) during the continuance of this agreement to be managed and directed exclusively by the manager and not to enter into any agreement or arrangement with any other manager or person for any of the above-mentioned purposes without obtaining the prior written consent of the manager . . .' A few months later Benn and Warren fell out and Benn asked Mendy to act 'as my agent to advise me on all matters concerning my career'. Warren sought an injunction against Mendy to restrain him from inducing Benn to breach his contract with Warren.: Court of Appeal refused an injunction to restrain the defendant from inducing boxer Nigel Benn to break his contract with his manager by participating in a match arranged by the defendant. The court held that it was unrealistic to conclude that a boxer could choose between his sport and alternative employment.

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cases where injunctions granted it very often happens that the injury suffered in consequence of the breach of the agreement would be out of all proportion to any pecuniary damages which could be proved or assessed by a jury. This circumstance affords a strong reason in favour of exercising the discretion of the court by granting an injunction.': Warner Brothers Pictures Inc v Nelson Nelson entered into a contract with Warner Brothers whereby she agreed to render her exclusive services as a motion picture actress solely and exclusively to Warner Brothers. ,She also agreed, by way of negative stipulation, that: 'she will not, during [the term of the contract] render any services for or in any other photographic, stage or motion picture production or productions, or business of any other person or engage in any other occupation without the written consent of the producer being first had and obtained.' Later, Nelson, declined to be further bound by the agreement entered into an agreement in England with a third person. Warner Brothers commenced an action against Nelson and claimed declaration that the contract was valid and binding, an injunction to restrain her from acting in breach of it, and damages.

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cases where injunctions not granted court ought not to enforce the performance of the negative obligations if their enforcement will effectively compel the servant to perform his positive obligations under the contract.: Page One Records Ltd v Britton (manager and pop group)