CASE ANALYSIS 4

CASE ANALYSIS 4

Running head: CASE ANALYSIS 1

Case Analysis

Student’s Name

Institutional Affiliation

Author Note

Case Analysis

Question one

Can the court give an order of specific performance in respect of the contract?

First of all, we have to consider the reality that specific performance is an equitable remedy which can only be granted at the discretion of the court according to the underlying circumstances in each case. Looking at our case, the court will not give the remedy of specific performance because the circumstances herein do not allow. Precisely, the following reasons account for the preceding statement:

1. i) Those who seek equity must do so with clean hands. The company doesn’t have clean hands since it has an argument issue between them and their client which the company has not solved, meaning they are seeking equity yet they are not willing to do equity.
2. ii) Contracts of personal service are not specifically performable because if they were, it could be like promoting slavery by forcing someone to maintain a personal relationship which he/she doesn’t freely want to as was held in De Francesco v. Barnum by Fry L.J (Turner, 2014). Besides, courts are not prepared to access applications on whether there has been proper performance of the obligation under question. Indeed, Megarry J. suggests that the reasons are firmly based on human nature (Turner, 2014).

iii) The remedy is applicable if damages are not an adequate remedy, which is not true in our case. Damages have been stipulated in an instance of breach of contract in this case hence implying that damages are an adequate remedy and thus specific performance is not applicable.

In conclusion, the remedy of specific performance cannot be granted under these circumstances.

Question two

How could the court determine the validity of the liquidated damage clause?

If the sum payable after a breach of a contract is a genuine estimate of the loss occasioned then that is liquidated damages, but if the sum payable after the breach is more than the loss, then it is a penalty. If the damages are more than the loss occasioned, then they are void or in other words invalid. Hence penalties are invalid. The ways for determining whether damages are liquidated hence valid or penalties hence void are as follows;

1. i) If the amount payable is extravagant, it is deemed as a penalty
2. ii) If a single lump sum is payable for the occurrence of several events, then it is deemed as damages

iii) If the sum payable is for the occurrence of one event, then it is deemed as liquidated damages

1. iv) If the sum payable for non-payment of another is greater, then it is deemed as a penalty
2. v) If pre-estimation is problematic, then it does not mean the sum set is a penalty

Is this clause valid?

The liquidated damage clause in our case is invalid.

Explanation

This is because no estimation was given and hence the sum probably has no relationship with the actual loss that will occur. It is only stipulated in the contract to ensure that it compels performance of the part in which it is asserted against. Penalties are void and not binding on the parties to the contract. In Willis v. Smith, it was held that liquidated damages are an amount representing the actual loss and are awarded irrespective of the actual loss (Chen-Wishart, 2018). A court doesn’t award penalties but assesses the amount payable by applying the rules of assessment of damages.

References

Chen-Wishart, M. (2018). Contract Law. New York, NY: Oxford University Press.

Turner, C. (2014). Unlocking Contract Law. London, England: Routledge.