40 Questions
What is the term for a court's order to perform a positive obligation in a contract?
Specific Performance
What type of obligation is commonly found in contracts for the sale of a business?
Negative obligation
What is the purpose of a restrictive covenant in a contract of employment?
To restrict an employee from working for a rival employer in the same area
What is the term for a court's order that a party do the very thing they undertook to do in a contract?
Literal Performance
What is not a type of literal performance mentioned in the lecture?
Rectification
In the common law, what is the secondary remedy?
Specific Performance or Injunction
What type of damages are provided for in a contract?
Liquidated Damages
What is the purpose of liquidated damages?
To enforce literal performance of the contract
What is the difference between liquidated damages and unliquidated damages?
Liquidated damages are specified in the contract, while unliquidated damages are determined by the court
What will be discussed in the next two lectures?
Specific Performance and Liquidated Damages
What is the primary remedy for a breach of contract in the common law?
Damages
What is the purpose of equitable remedies in a breach of contract?
To seek the performance of the contract
What is an injunction in the context of contract law?
An order that prohibits a party from certain actions
What is the purpose of an order of specific performance?
To compel a party to perform a contract
What is literal performance in the context of contract law?
The court ordering a party to do exactly what they undertook to do
What is the nature of liquidated damages?
A combination of damages and literal performance
In what context can liquidated damages clauses be considered valid?
When the court exercises its discretion
What is the primary objective of understanding liquidated damages clauses?
To understand how to establish their validity
What is the significance of the Cavendish Square Holdings v Makdessi case?
It changed the law regarding liquidated damages clauses
What is an example of a situation where a liquidated damages clause might be used?
A construction contract to build a factory
What is the effect of a breach of contract in Example 1?
A further sum of £500 is payable
Why is the clause in Example 2 not subject to the penalty jurisdiction?
Because the extra £500 is not a sum payable on a breach of contract
What was the significance of the case of Cavendish Square Holdings v Makdessi in 2015?
It reformed the law on contractual penalties
What is the penalty jurisdiction?
A court's power to review and amend contractual penalties
What is the purpose of the penalty rule?
To determine the validity of a contractual clause
What is the primary effect of an injunction in a contract dispute?
To prohibit certain conduct
In what circumstances would an injunction not be granted in a contract dispute?
When an order for specific performance would not be granted
What is the underlying assumption of an award of damages in a contract breach?
That substitutes are available
What is the purpose of an examination question that asks about the adequacy of damages as a remedy for a breach of contract?
To test the student's understanding of the nature of damages as a remedy
What is the significance of the Warner Bros v Nelson case in the context of employment contracts?
It demonstrated the effectiveness of an injunction in enforcing a negative covenant
In the case of Cavendish v Makdessi, what was the reason for the validity of the clause?
The purchaser had a legitimate interest in protecting the business they bought.
What was the outcome of appeal number 1 in the case of Cavendish v Makdessi?
The clause was valid due to the purchaser's legitimate interest.
What is the comparison between appeal number 1 and appeal number 2 in the Cavendish v Makdessi case?
Appeal number 1 involved a multimillion-pound sale of a business, while appeal number 2 involved a £85 payment for parking.
What is the purpose of a clause that forces the seller to pay a large sum of money if they breach the agreement?
To protect the purchaser's legitimate interest in the business.
What is the main test for the validity of a clause?
The party seeking to enforce the clause must have a legitimate interest, and the sum in the clause must be proportional to the protection of that legitimate interest.
What is the consequence if the seller breaches the agreement in the case of Cavendish v Makdessi?
The seller has to pay a large sum of money.
What is the main difference between appeal number 1 and appeal number 2 in the Cavendish v Makdessi case?
The amount of money involved.
Why was the clause enforcing the promise not to compete valid in the Cavendish v Makdessi case?
Because the purchaser paid full value for the business.
What is the purpose of a clause that requires the seller to pay a large sum of money if they breach the agreement?
To protect the purchaser's legitimate interest in the business.
What is the test for the validity of a clause, according to the new test?
The party seeking to enforce the clause must have a legitimate interest, and the sum in the clause must be proportional to the protection of that legitimate interest.
This quiz covers the concepts of liquidated damages and discretionary remedies in the context of contract law. Learn about the court's discretion in exercising remedies and the principles that guide this process. Test your knowledge of liquidated damages and their dual existence in contract law.
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