Contract Law: Specific Performance and Injunctions

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Questions and Answers

Why will an injunction not be granted in certain cases of contractual promises?

It is considered an outdated legal principle.

It would violate the terms of the contract.

It might lead to financial loss for the enforcing party.

It would force the party to perform a positive promise. (correct)

In the case of Lumley v Wagner, what type of promise did W breach?

An implied promise

A negative promise

A conditional promise

A positive promise (correct)

What was the outcome of the court's decision in Lumley v Wagner regarding the negative promise?

An injunction was issued to prevent breach. (correct)

A monetary penalty was imposed.

The injunction was denied.

W was ordered to pay damages.

What does the reasoning imply about a party's ability to earn a living when an injunction is applied?

The party can still pursue other legitimate ways to earn income. Signup and view all the answers

What critical issue arises regarding the reasoning for granting injunctions in contract law?

If it reflects current societal norms. Signup and view all the answers

What is the primary purpose of equitable remedies?

To offer remedies when common law remedies are insufficient Signup and view all the answers

Under what circumstance will specific performance not be ordered?

When repetitive court supervision is required Signup and view all the answers

Which of the following is an example of a situation where damages would not be adequate?

A unique piece of art Signup and view all the answers

What was the outcome in the case of Dougan v Ley concerning specific performance?

L was entitled to an order of specific performance Signup and view all the answers

Why might a court deny equitable remedies?

An identical item is available elsewhere Signup and view all the answers

What type of remedy is specific performance considered to be?

Equitable remedy Signup and view all the answers

Which of the following describes the role of injunctions in equitable remedies?

They are used to prevent a party from taking action Signup and view all the answers

Under what circumstance is specific performance generally not ordered?

If the contract requires ongoing performance over an extended period Signup and view all the answers

What is meant by saying that equitable remedies are not available 'as of right'?

They require court discretion to be awarded Signup and view all the answers

What is an injunction primarily used for?

To prevent a threatened or continuing breach of contract Signup and view all the answers

In the case of JC Williamson v Lukey, what was the key reason specific performance was not granted?

The parties’ relationship had soured Signup and view all the answers

What might indicate that specific performance would be inappropriate?

The item in question is widely available Signup and view all the answers

What might prevent an injunction from being granted?

If damages are deemed adequate Signup and view all the answers

What was the contractual term that B was restricted by in Buckenara v Hawthorn Football Club?

Not to play for other clubs while contracted Signup and view all the answers

Which of these is NOT a characteristic of specific performance?

Only applies to monetary transactions Signup and view all the answers

What does the term 'indirect enforcement' refer to in the context of injunctions?

Enforcement of promises that are generally unenforceable Signup and view all the answers

Study Notes

Limited Taxi Licenses

Limited taxi licenses can affect the availability in the market.
Awarding damages may be insufficient, leading to the need for specific performance.

Specific Performance Overview

Specific performance is a remedy that orders a party to fulfill their contractual obligations.
Not suitable when ongoing relationships requiring future cooperation are involved.

JC Williamson v Lukey Case

W leased a confectionary shop next to a theatre to L with exclusive selling rights.
Three years into the lease, W breached the contract by allowing another seller.
L sued for breach, but specific performance was deemed unavailable due to the need for continuous oversight and a souring relationship.

Injunctions Explained

Injunctions are orders preventing a party from acting in a certain way, useful for stopping or preventing contract breaches.
They are only granted when damages are not an adequate remedy.
Cannot enforce a promise that a court would not uphold through specific performance.

Buckenara v Hawthorn Football Club Case

B was under contract not to play for other clubs while with HFC.
HFC sought an injunction to prevent B from playing for other teams.
The court granted the injunction, as it didn't force B to play for HFC but just prevented him from breaching the contract.

Lumley v Wagner Case

W had a contract to sing at L's theatre, including a negative promise not to perform elsewhere.
W breached the positive promise and threatened the negative promise.
An injunction was granted to restrain W from breaching the negative promise, as it didn't enforce a performance that the court wouldn't support with specific performance.

Equitable Remedies Overview

Courts of Equity provide remedies when common law remedies (like damages) are inadequate.
Examples include specific performance and injunctions.

Specific Performance in Detail

Specific performance requires the party in breach to fulfill their obligations.
Not ordered when damages suffice, when continuous supervision is needed, or when personal relationships or goodwill are central.

Understanding Damages Adequacy

In general, damages are acceptable for ordinary goods since they can be replaced.
If goods are unique, like a one-of-a-kind vase, damages are inadequate, justifying specific performance.

Dougan v Ley Case

D sold a taxi and its operating license to L but later refused to perform the contract.
L was entitled to specific performance as damages wouldn't adequately compensate for the specific value of the taxi operation.

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Description

This quiz explores the concepts of specific performance and injunctions within contract law. It highlights the case of JC Williamson v Lukey, discussing the implications of limited taxi licenses and the limitations of granting specific performance. Test your understanding of these legal remedies and their applications.