Equitable remedies

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1) Definition of SP:

Order from court that a party fulfill obligation under the contract

Alternative remedy where damage is not adequate or not beneficial (Harnett v Yeilding: Lord Reesdayle, “…damage would not give the party the compensation he is entitled to as if the agreement was specifically performed)

Fulfill expectations interest of the innocent party

2) Valid Contract:

Breach of contract equals cause of action equals SP

Contract must be valid for it to be enforced (eg land must be sealed in a deed in accordance with doctrine of part performance)

2.1) Consideration and adequacy of consideration

Consideration: Although under seal, contract must have consideration (Jeffrey v Jeffrey: Lord Chancellor, “…the court will not execute a voluntary contract…court withholds assistance from the volunteer equally).

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Adequacy of consideration:

Court must be satisfied (mountfort v Scott: entering of an agreement with the option to later purchase a house for 1p entitled P to get SP, which was also irrevocable)

Adequacy of consideration is not sufficient a reason to resist SP, but relevant for undue influence/unfairness (Clark v Malapas)

2.2) Valid Contract terms:

No enforcement of vague/indefinite/imprecise contract terms (equity does not act in vain)

Cases:

Joseph v National Magazine Co –(Jade expert and purported article) court could not order SP because terms were not sufficient precise thus damages was adequate

Barrow v Chappell: (Publication of music = no personal serv ice) SP granted because contract was not for a personal services as well as the terms were clear thus damages inadequate 3

2.3) legal Disability:

Lumley v Ravenscroft: SP was not ordered because one of the two parties to the contract was a minor at the time

2.4) Privity of contract

SP will not be granted to those who are not parties to the contract

Exception: lease assignment, SP may be granted under the head lease.

3) SP-action in personam

Directed to the person to fulfill the obligation

Thus privity is important (Re Hawthorne)

Makes order against def personally

4) SP – discretionary order

a) Basis for Jurisdiction

SP reward only on equitable ground (except in exceptional circumstances)

Def is within jurisdiction, thus basis is good conscience to compensates P’s lost (Harnett v Yeilding) 4

b) Common Instances:

i) real property:

Land is common instance because of its unique character – ie value fluctuation over periods

No SP where unjust

Warmingthon v Miller: No SP because sub lease was breach not to underlet, damage ordered instead

ii) Unique Personal property:

ordinary article of commerce with no specific value or interest –damage would be sufficient

If unique character exist or is developed then SP would be ordered because damage would be insufficient

Cohen v Roche: No SP because set of chairs were ordinary articles of commerce with no value or interest

New Brunswick v Canada: Shares were unavailable and as such became unique, SP ordered

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iii) Unjust enrichment:

Person being enriched at the expense or detriment of another

Obligation to make restitution arises

SP may be granted on this ground where third party has a benefit and damages is inadequate (Beswick v Beswick- damages would have been nominal and nephew unjustly enriched if he retained the house)

iv) Contractual terms:

Terms indicate that there should be SP in default, a matter for court to decide (Warner Brothers Pic v Nelson – contract can be extended if P fails to perform-no SP for personal service)

c) Building Contracts

Usually no SP because it is complex and indefinite(and contracts must be precise)

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Exceptions:

definite works with specific particulars

Contract is of such importance that damages would be inadequate (Wolverhampton v Emmons – SP ordered because defs obligation was precise and damage would be in adequate, p could not get another contractor)

5) Factors considered:

a) Ps conduct – clean hands:

P must have entered contracted in good faith

Unjust/fraudulent act/taken advantage of superior bargaining position = no equitable relief (Jones v Lipman –P tried to evade SP by conveying a house , he contracted to buy to a company for the same purpose)

NOTE: absence of clean hands not a complete bar

b) Unfairness and hardship:

Unfairness: unjust to grant SP to P who was at a position of advantage (Def was drunk, sick, emotional)(Clark v Milpas-def poor and ill educated)

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Hardship: SP would operate harshly against the def. (Patel v Ali: couple agreed to sell house then sickness and children overtook, stated difficult to leave house because neighbours assisted…no SP because of hardship, damages instead)

c) Futility of performance:

No SP because impossible or futile to perform (Tito v Waddell: court will not make an order where the issue is a short tenancy, its futile; Castle v Wilkinson: sale could not be completed because P had not obtained a life deed)

Impecuniosity in futility (having little money)

Impossibility of performance because there is no money or very little (Titanic Quarter v Rowe: sale of house could not be completed because def suffered hardship or impecuniosities)

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d) Inadequacy of legal remedy:

Damage is adequate, no SP

Factors to consider:

i. Subject matter of the contract (unique v common instances)

Common instance (property) -(warmingthon v Miller – Damages sufficient, No SP case of a breach of covenant not to underlet)

Unique personal property (Cohen v Roche: set of chairs were ordinary article with no value or interest – no SP, property was not of value)

ii. Damages difficult to estimate:

Price of dividends cannot be determined (Adderlyv Dixon: damage at law would not be adequate and so SP to sell the shares at a speculative price)

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iii. Nominal damages (Beswick v Beswick)

6) Contracts if personal Service

Generally not enforceable (complexity, uncertainty, public policy, undesirability, supervision problems, etc) (Lumley v Wagner: court has no power to make her sing but could make her not sing for the other person in honouring the contract; Ryan v Mutual Tortine: porter was of personal nature could not supervise; contrast with Posner v Scott Lewis porter here was a resident and did not require supervision)

Distinguishing Ryan from Posner

Supervision required was continuous, Posner did not require

Ryan personal Posner not

One merely and agreement with such services(posner) but not personal

Personal services includes employee and agent partner10

7) Contracts requiring constant supervision

General rule: equity will not order acts it cannot supervise = no SP (Ryan v Mutual Tortine; Posner v Scott-Lewis; CH Giles v Morris: court considers human nature and used the example that a person cannot be told how to sing)

c. Lack of mutuality

Obligations must be mutual among the parties or equity will not enforce-No SP (price v Strange: no mutuality at the time of the contract because his obligation required constant supervision)

Perfect mutuality not essential

Time of mutuality-time of the hearing

Critical time for mutuality is at the time of the hearing (Price v Strange: repairs and renovations done at the time of the hearing mutuality was present at the date of the hearing,

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8) Defenses for Specific Performance a. Mistake and Misrepresentation: (Solle v Butcher:

equitable jurisdiction created by Lord Denning; Great Peace: there is no equitable jurisdiction in common mistake)

b. Conduct of the claimant: cleans hands doctrine (Coatsworth v Johnson: improper conduct constitutes illegal not immoral conduct but must have relation with the equity sued for)

c. Laches: Time delay not of the essence as common law Time delay does not bar the party who failed from

asserting his right Unreasonable delay causes injury and may become

prejudicial to the matter Delay must be sufficient to amount to abandonment

or a waiving of P’s right, so that it becomes unjust to order SP Lindsay Petroleum v Hurd (supports all the

abovementioned points)12

Unreasonable delay in seeking SP (Lazard Bros v Fairfield Prop: equity wants P to assert his right with sufficient speed=consideration of whether it would be just to grant SP in the circumstances)

d. Public policy consideration ( Verral v Great Yarmouth: arrangements made of great magnitude that will affect people will be enforced)

9) Part Performance

1. Doctrine of PP defined

Principle engrafted in the Stature of fraud

One party wholly/partially perform his obligations in the contract and the other party has not

Prevents the statute from being used as a vehicle of fraud

ER

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Aggrieved party usually gets enforcement of the oral contractor although its against the statute that indicates it should be written

2. Basis do the doctrine -Prevention of injustice

Prevents the failing party from avoid his obligation

SP only granted if fair:

No undue influence

No hardship

Clean hands doctrine

Madison v Alderson: traditional test “acts done in PP are sufficient if agreement existed unequivocally (albeit oral)

Criticism:

Test tough

Does not say who must do the act

Only referable to a contract – only the one alleged14

Steadman v Steadman: sufficient to show that the acts done was in reliance to contract, but does not necessary have to prove that there was a contract – must be more probable than not

Effect:

relaxation of standards of the statute

Payment of money cannot amount to PP (Steadman: act relied on was the payment of money by the husband under the oral contract)

3. Components of the performance

a. acts may be referable to some possible love/affection (Steadman v Steadman: broken down marriage where husband agrees yo pay maintenance if wife transfers her share of the matrimonial home)

b. payment does not constitute PP (Chaproinere v Lambert suggest that payment is sufficient to constitute PP but Steadman does not agree) 15

c. Def conduct must be such that it is inequitable for him to take advantage of the failure

d. contract must be enforceable (maddison v Alderson)

e. must have proper parole evidence (Chaproinere v Lambert)

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