Breach of Contract and Remedies

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Questions and Answers

What constitutes an actual breach of contract?

When one party voluntarily terminates the contract.

When the obligations of a contract are fulfilled before the deadline.

When no performance occurs even though the time for performance has arrived. (correct)

When a party indicates unwillingness to perform before the deadline.

Which of the following correctly describes anticipatory breach?

A party explicitly expresses unwillingness to perform before the performance deadline. (correct)

Where a contract is terminated due to mutual agreement.

Performance is partially completed before the deadline.

A party performs their obligations but does so inadequately.

Which of the following is NOT a remedy for breach of contract?

Cancellation/rescission

Injunction against damages (correct)

Damages

Specific performance

What is generally required for specific performance to be granted?

There must be no potential hardship to the public. Signup and view all the answers

What type of damages restores the actual loss incurred by the claimant?

Compensatory damages Signup and view all the answers

Which scenario illustrates the principle of specific performance being a discretionary remedy?

Compelling a seller to transfer property that they live in. Signup and view all the answers

Which of the following statements is true regarding damages?

Damages can include compensation for intangible losses. Signup and view all the answers

Under what condition can specific performance be denied even if requirements are met?

If the court determines hardship to the community. Signup and view all the answers

What type of damages are awarded for a breach of contract that cannot be easily quantified, such as loss of profits?

Consequential damages Signup and view all the answers

What are liquidated damages?

An agreed-upon amount for damages before any breach occurs Signup and view all the answers

Which type of interdict compels a party to refrain from an action contrary to the contract?

Prohibitory interdict Signup and view all the answers

What is required to successfully obtain an interdict?

A clear right and apprehension of irreparable harm Signup and view all the answers

What does rescission of a contract entail?

End or cancellation of the contract Signup and view all the answers

What constitutes nominal damages?

Minimal compensation awarded despite the breach Signup and view all the answers

Which statement is true about damages after rescission?

Damages can be awarded in addition to rescission. Signup and view all the answers

What does the balance of convenience refer to in the context of interdicts?

The greater inconvenience to the claimant if the interdict is not granted Signup and view all the answers

Study Notes

Breach of Contract

Breach of contract occurs when a party fails to fulfill their obligations under the contract.
An actual breach occurs when the time for performance has arrived, but a party fails to perform.
The victim of an actual breach can accept the breach and sue for damages or affirm the contract and sue for specific performance.
An anticipatory breach occurs when, before the time for performance has arrived, a party indicates their unwillingness to perform.

Remedies for Breach of Contract

Remedies address the harm or loss caused by a breach of contract.
Specific performance is an equitable remedy that compels the defaulting party to perform their obligations under the contract.
Damages are monetary compensation awarded to the injured party to restore their loss.
Interdict is a court order that either prevents a party from acting contrary to the contract (restraining/prohibitory) or compels a party to undo the breach (mandatory).
Rescission terminates the contract, effectively cancelling it.

Specific Performance

Specific performance is a discretionary remedy, meaning the court may deny it even if the requirements are met.
Courts generally will not order specific performance for personal services.
Specific performance will usually be refused if it creates hardship for the public or community.

Damages

Compensatory damages are meant to restore the plaintiff's loss, covering both tangible and intangible losses.
Liquidated damages are agreed-upon amounts of compensation for breach, set forth within the contract.
Special damages are easily quantifiable losses, such as medical expenses.
Nominal damages are awarded when the defendant is at fault but the plaintiff has suffered no actual loss.
Consequential damages exceed the actual loss and are only awarded if the loss was reasonably foreseeable by the defendant.
Punitive/Exemplary damages are awarded as punishment for outrageous or egregious breaches of contract.

Interdict

An interdict will only be granted if the claimant can demonstrate a clear right that is being infringed upon or is about to be infringed upon.
The claimant must also demonstrate that the harm cannot be adequately compensated by damages.
Balance of convenience weighs the potential inconvenience to the claimant if the order is not granted, against the potential inconvenience to the defendant if the order is granted.

Rescission

Rescission may be agreed upon by the parties within the contract.
Rescission is also available if a contract was entered into due to misrepresentation, duress, or undue influence.

Ending a Contract

A contract is discharged when both parties have fulfilled their reciprocal obligations.

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Description

This quiz explores the concepts of breach of contract, including actual and anticipatory breaches, as well as the various remedies available for breaches. Test your understanding of specific performance, damages, and other legal actions that can be taken. Discover key terminologies and legal intricacies related to contractual obligations.