ELEMENTS OF LAW OF CONTRACT - REMEDIES

REMEDIIES

There are three major remedies available to an injured party in a contract. These are rescission, remedy and specific performance.

Rescission

Rescission is available in principle to all types of misrepresentation. For rescission for misrepresentation the contract is set aside for all purpose and the aim is to restore the party to where they were before the contract. It has retrospective effect. Rescission for breach releases the party from future obligation but would not threat the contract as if it never existed. Right to rescind may be lost by affirmation, intervention of an innocent third party or lapse of time. For rescission contract damages cannot be claimed, but personal restitutionary claim may be available Withinton v Seale Hayne. Other losses are only available in fort. If a claimant lost the right to rescind, he may not get damages due to lapse of time Thomas Willer v TDP Industries Ltd (1996). However, Floods of Queenferry Lrd v Shawd Construction Ltd. (2001) did not follow the decision.

Damages

Contractual damages do not lie for misrepresentation unless incorporated. Damages may however be recovered in tort for fraudulent or negligent misrepresentation. The aim of damages was to put the contract where they would have been without the breach. Exemplary (or punitive) damages can be recovered (2002). Aggravated damages may be awarded to compensate for injured feeling (Archer v Brown (1985). Basically, the court is ready to give reliance interest rather than of expectation interest. Example of reliance interest is Royscot (1991). Damages may be reduced on the basis of contributory negligence Gran Gelato (1992). Power to award damages is discretionary.

REMEDIES

Notwithstanding the statutory advantage a claimant must have recourse to common law in there situations:

a) where the misrepresentation is made by a third party
b) Where the contract is void ab initio
c) The court may hesitate to find existence of misrepresentation given the draconian Avon Insurance Plc v Swire Frazer Lrd (2001)

In view of the fact that Misrepresentation renders a contract voidable, the remedies available to the injured party are rescission and damages.

Rescission is available in principle for all types of misrepresentation as it set asides the contract for all purposes and seek to restore the parties to where they were before the contract (retrospective). Rescission for breach releases the party from future obligations but the contract is not treated as if it never existed. The injured party is required to give notice of rescission and right to rescind may be lost by affirmation. This may be to protect an innocent third party or due to lapse of time. Contractual damages cannot be claimed for rescission but personal restitutionary claim may be available Withintin v Seale Hoyne while other loses are only available in tort.

Contractual damages does not lie for misrepresentation unless the damages is incorporated into the contract. Damages may be recovered in tort for fraudulent and negligent misrepresentation. The aim of damages is to put the defendant where he would have been. Exemplary (or punitive) damage is recoverable Kuddues 2002. Aggravated damages may be awarded for injured feelings Archer v Brown (1985). The court is basically ready to give reliance interest rather than expectation interest. Damages may be reduced on the basis of contributory negligence Gran Gelato Ltd (1992). Damages are not available for innocent misrepresentation and power award damages is discretionary and re in lieu of rescission.

The measure of damages under s.2(2) should never exceed the sum if the representation has been a warranty. If a claimant lost the right to rescind, he may not get damages due to lapse of time Thomas Miller v TBP Industries Ltd but Flood of Queenferry Ltd v Shand Construction Ltd (2001) did not follow this.

EXCLUSION CLAUSES

At common laws a person could not exclude liability for his own fraudulent misrepresentation S Pearson & Sons Ltd v Dublin Corporation (1907) and High Casualty and General Insurance Ltd v Chase Manhattan Bank (2006) but could exclude liability for negligent or innocent misrepresentation subject to strict rules relating to incorporation and construction s.3 of the Misrepresentation Act (as amended by s.8 of the Unfair Consumer Contract Act 1968) limits the freedom of parties to exclude liability for the consequences of misrepresentation. In Watford Electronics Ltd v Sanderson CFL Ltd (2001) and Overbrooke Estates Ltd v Glencombe Properties Lted (1974) Courts have concluded that the section does not apply where one party acknowledges that he has not relied on a statement made by the other part. That notwithstanding in Cremdean Properties v Nash (1979) and South Western Property Ltd. Court have held such clause to be within the scope of s.3.