In this week’s blog, we will be discussing remedies that are available to an aggrieved party in instances where there is a breach of contract. A breach of contract occurs when a party to an agreement fails to fulfil any of the agreed-upon terms and conditions of the contract. When this occurs, the aggrieved party has legal recourse to sue the other party. There are different types of remedies that are available to the aggrieved party and the selection of a remedy largely depends on the type of breach and the facts and circumstances surrounding the breach of contract and lastly the recourse that the aggrieved party wishes to pursue. Under Zimbabwean law, there are several remedies for breach of contract, mainly an award of damages, specific performance, cancellation, interdicts and a declaration of rights. These will be discussed in detail below:
Damages
The rationale for awarding damages to an aggrieved party based on a breach of contract is to place that party in the position he would have occupied had a breach not occurred by the payment of money and without causing undue hardship to the defaulting party. The court looks at the patrimonial position that the aggrieved party would have occupied had the breach not occurred and the position that exists as a result of the breach. As such the aggrieved party would therefore be entitled to the difference where the former exceeds the later. In essence, the sufferer by such breach should be placed in the position he would have occupied had the contract been performed, so far as that can be done by the payment of money, and without undue hardship to the defaulting party. It should also be noted that damages are claimed only for financial loss with due consideration to the extent to which the innocent party has mitigated their loss incurred as a result of the breach. There is no actionable duty to mitigate loss, but the extent of recoverable damages will be reduced where the innocent party has failed to take steps open to them to mitigate their loss.
Specific performance
Specific performance is a remedy which compels a party to perform a contractual obligation in terms of the agreement. For instance, if a party was required to deliver a motor vehicle in terms of the agreement and fails to do so for whatever reason, the remedy of specific performance would compel the party to perform its obligation in terms of the agreement. It is an equitable, discretionary remedy that is only granted where it will ‘do more perfect and complete justice than an award of damages’ and is not available in respect of contracts of personal service or employment. It is a remedy most usually employed in contracts for the sale of land or shares, or to compel landlords to carry out their repairing obligation.
Cancellation
The remedy of cancellation is available where the breach of the contract goes to the very root of a contract. However, in some instances, parties can agree to cancel their agreement. Alternatively, cancellation may be a remedy sought from the court under its equitable jurisdiction in cases, eg where a contract has been entered into on the basis of a misrepresentation.
Interdict
The grant of interdict relief is at the discretion of the court. An interdict can either be mandatory that is requiring the defaulting party to take a certain step(s), or prohibitor that is restraining the defaulting party from taking a (further) step(s). Interdicts can be ordered on either on an interim basis that is effectively preserving the status quo pending the underlying dispute between the parties can be resolved, or on a final basis. An example of an order restraining a party to a contract from disposing of the certain property until the substantive dispute has been concluded.
Declaration of rights
The remedy for declaration of rights is essentially a declaration made by the court at the request of a party to remedy a breach of contract. This for instance can be in relation to the rights of a party to a dispute or to the existence of certain facts or to a principle of law. This remedy is effective in that it resolves differences between parties prior to any (potential) breach by one of them.
In conclusion, the purpose of remedies for breach of contract is to punish the party that has breached the contract by providing recourse to the aggrieved party. Careful consideration must be had when selecting a remedy which would be suitable in the circumstances.
Disclaimer;
The information and opinions expressed above are for general information only. They are not intended to constitute legal or other professional advice. For clarification, assistance, or if you have questions, contact Lex amicus for more information on lexamicus@outlook.com.
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