Anaya Nolan
There are several common law remedies available, which can be broadly categorized into legal remedies and equitable remedies. Legal remedies, or monetary damages, are granted by a court of law and are awarded to compensate for a loss or injury. Equitable remedies, on the other hand, are granted by a court of equity and are more flexible, aiming to provide a fair and just solution to a dispute. In the context of breach of contract, common law remedies include compensatory damages, expectation damages, temporary injunctions, rescission, and more.
| Characteristics | Values |
|---|---|
| Nature | To compensate the non-breaching party for harm caused by the breach |
| Aim | To put the injured party in the position they would have been in if the contract had been performed |
| Types | Compensatory damages, expectation damages, consequential damages, punitive damages, nominal damages, temporary injunctions, permanent injunctions, rescission, reformation, declaratory remedies, equitable remedies, legal remedies |
| Limitation | The non-breaching party must act promptly to rescind at common law, or their remedy will be limited to damages in tort |
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What You'll Learn
Monetary damages
There are three categories of monetary damages in the civil litigation context: compensatory, punitive, and nominal damages. Compensatory damages, also known as actual damages, seek to compensate the victim for actual losses incurred. These damages are based on the actual losses sustained as a result of the breach of contract and typically fall into two categories: expectation damages and consequential damages. Expectation damages are those that directly result from the breach of contract. For example, if a company that provides bus tours enters into a contract to buy a bus for $100,000, but the seller backs out and refuses to sell the bus, and the bus company finds another seller but has to pay $110,000 for a similar bus, the expectation damages would be $10,000. Consequential damages are often attempted to be avoided by the breaching party, who may claim that they are too speculative or unforeseeable.
Punitive damages, also known as exemplary damages, strive to deter future similar conduct from other parties. They are awarded to make an example out of defendants and deter future conduct from other parties who may be in a similar situation. Nominal damages, on the other hand, provide very little monetary compensation but are awarded to prove a point rather than compensate the plaintiff. An award of nominal damages may also enable the plaintiff to seek their attorney fees from the defendant if the contract has an attorney fee provision.
In addition to these three categories, monetary damages can also include the refund of money paid by the buyer for goods that were not delivered by the seller. Furthermore, monetary damages can be claimed in tort if a party is the victim of fraud but fails to act promptly to rescind the contract.
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Non-monetary compensation
Additionally, non-monetary relief in the context of breach of contract refers to remedies or compensations provided in legal contexts that do not involve direct financial payments. Instead of monetary compensation, non-monetary relief may encompass injunctions, orders for specific performance, or other equitable remedies. The aim is to place the aggrieved party in a position as if the contract had been fully performed without involving monetary transactions.
In the case of breach of contract, non-monetary relief serves as an alternative to monetary damages. It provides an act different from what was initially agreed upon, compensating for the loss caused by non-performance. For instance, a non-breaching party may choose to cancel the contract (rescission) rather than seek monetary damages. However, to justify rescission, the breach must be material and go to the heart of the contractual agreement.
The availability of non-monetary relief in breach of contract cases is influenced by various legal systems and traditions. In the Chinese legal system, for example, non-monetary relief is available but remains under-explored. On the other hand, in common law jurisdictions, the focus is often on compensating the promisee for their loss rather than compelling the promisor to perform. This results in a preference for monetary damages as a remedy, with non-monetary relief being less frequently awarded.
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Rescission
The key characteristic of rescission is that it renders the contract void ab initio, meaning that it is treated as if it never existed. In other words, the parties are returned to the positions they would have been in had they never entered into the contract. This is distinct from other remedies, such as damages, which aim to compensate the non-breaching party for their losses without terminating the contract.
To claim rescission, the innocent party must notify the offending party of their intention to rescind and establish a cause of action that provides rescission as a remedy. However, there are several limitations and bars to rescission. For instance, if the contract has been affirmed or partially performed, or if a third party has acquired rights under the contract, rescission may no longer be available.
In some jurisdictions, such as Australia, the Court of Equity may grant partial relief under the contract if it aligns with good conscience and practical justice. Additionally, in certain cases, rescission may provide a better remedy for the innocent party compared to other options, such as the return of valuable property.
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Election of remedies
The doctrine of election of remedies refers to the principle that allows a party who has been wronged in a contract to choose among different available legal remedies or courses of action to address the breach. In other words, if a party has two or more inconsistent remedies for a single cause of action, or arising from a single transaction, only one remedy may be ultimately pursued and only one remedy satisfied.
The doctrine is often applied in contract cases where the plaintiff alleges that they were fraudulently induced to enter into the transaction. For example, the buyer of a property must choose between keeping the goods and suing for damages for fraud, thus affirming the contract, or rescinding the contract for fraud and returning the property, thereby disaffirming the contract. The remedies are inconsistent, and the plaintiff can have one or the other but not both.
The doctrine of election of remedies also applies to other areas of law, such as tort law. For instance, if a person is injured in a car accident, they may have the option to sue the other driver for negligence or to sue the manufacturer of the car for product liability. However, they cannot do both, and they must choose one remedy to pursue.
It is important to note that the choice of remedy depends on the circumstances of the case, the feelings of the wronged party, and the amount at stake. In some cases, the wronged party may need to act promptly to preserve their right to a particular remedy. For example, in cases of fraud, the defrauded party must act promptly to rescind the contract or their remedy will be limited to damages in tort.
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Temporary injunctions
A temporary injunction is a court order that is granted before a final determination is made in a case. It is designed to preserve the status quo until the case is resolved. Temporary injunctions are often ordered while litigation is pending to prevent potential damage. For example, in a lawsuit concerning a breach of a non-compete contract, a court might order the defendant to cease the allegedly competitive activity until the lawsuit is resolved.
To obtain a temporary injunction, the injured party must show that there is no adequate remedy at law and that irreparable harm will result if the relief is not granted. They must also demonstrate a likelihood of success on the merits of the case. If a party fails to comply with a temporary injunction, the court can hold them in contempt of court.
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Frequently asked questions
A common law remedy is a legal remedy that originates from the law courts of England and is typically granted in the form of monetary compensation, or damages, to the injured party.
Common law remedies include compensatory damages, expectation damages, consequential damages, and punitive damages. Non-monetary common law remedies include injunctions, rescission, and specific performance.
The purpose of a common law remedy is to compensate the injured party for their loss or injury and to restore them to their original position before the breach occurred.
