The contract is valuable right for the parties. It is a mean to share the duty and benefit between promisor and promisee. The contract is made in daily life of everyone for example hire, buy, borrow and so on. The duty in contract should be respected and treated in good faith by both parties. However, in the fact there are parties who breach the contract or be impractical. Its affect is damage. The compensation is one part of contractual right to remedy that plaintiff has. The remedies might be classified 2 types by nature of action that is affirmative and defensive. However, the classification in this essay is 6 sorts as following
1) The Compensatory damage
The Compensatory damage (so called “actual damages”) occurs when the one party do the breach of contract which cause of loss of the other party who is not non-performance parties. The other party can claim for compensate. This remedy give full protection to the plaintiff’s expectation interest for the example, the Uniform Commercial Code section 1-106(1),2-709(1)(a).[1]
2) Mental Anguish and Punitive damages
The mental anguish or emotional distress damages are on the medium between contract and tort. However, the injury would claim for a “tort” rather than a “contract”. For the example in Gaglidari v Denny’s Restaurants,Inc, the court held that emotional were not obtainable for breach of an employment contract. The court stressed that an employment contract did not have “elements of personality” and that the parties had not agreed to protect those losses. According to the court, the type of contract involved rather than the nature of the breach or whether the loss was predictable was the decisive issue.
Punitive damage is grant in special case and its objective is reform and discourage the defendant form his awful conduct such as loss arising from malice. The punitive damages can be only granted by the due process of law due to the fifth and fourteenth Amendments of the United States Constitution.[2]
3) The right to suspend performance
The right to suspend performance or cancellation may be called the promisee’s defensive remedies. This remedies is provided in the Uniform Commercial Code section 2-610 the option to “suspend his own performance”, the Uniform Commercial Code section 2-610(a)&(c) “ for a commercially reasonable time await performance by the repudiating party.” the Uniform Commercial Code section 2-611(1) “cancel or materially changed his position or otherwise indicated that he consider the repudiation final”[3]
In generally, the promisee has contractual obligation to perform .Nevertheless, if the promisor materially breach his duty, the promisee has legal right to withhold her own. Nonetheless, the utilization of the right to suspend may risk to be considered that the promisee breaches contract if a court holds that the other side did not breach the contract in material. There is the case which rule the important principle as following
Hochster v De La Tour
The defendant hired the plaintiff as a courier on April. The plaintiff‘s work started on the first June. The defendant repudiated the contract on May 11th, and the plaintiff sued on May 22nd for a salary of three months term. The material issue in this case is the plaintiff can sue before the date of performance. The court holds that the action of damage can appear immediately when the anticipatory refutation occurs.
4) Cancellation
In case of repudiation or failure of the other party to perform a material part of the agreed exchange. The remedy in the minimum level is to suspend and in the maximum level is to “cancel”. The cancellation is provided in Uniform Commercial Code section 2-106 as following
“(3)”Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On “termination “all obligations which are still executor on both sides are discharged but any right based on prior breach or performance survives.
(4) “Cancellation “occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination “except that the cancelling party also retains any remedy for breach of the whole contract or any unperformed balance.”
First, it is necessary to separate a claim for damages occurring from breach from the cancellation remedy. This remedies is obtainable for non-breaching parties.
5) Equitable remedy
Equitable remedy is specific performance. Its historical roots derived from English law of equity. Firstly, it is necessary to explain about the damage which is the basic remedy in common law system. Then, the common law evaluated the second system for the purpose that it will handle ever system properly-damages. If the Damages are inadequate, fall back to second system-system of equity that is 2 possible remedies: One is specific performance that are told what to do perform the primary obligation and the other one is negative injunction that are told to refrain from doing something.
Equitable remedies give the right to the plaintiff to acquire the actual performance agreed by the defendant rather than damages. The courts empower to issue an order to the defendant, directing conduct of a specified sort, and to punish nonconformity by a fine or imprisonment for disdain. Specific performance is not available as a right but obtainable according to the discretion of the court. The court has to evaluate the balances: The plaintiff has to show inadequate damages and specific performance would not be tedious on the defendant, on the other hand, the defendant would prove need to show his client is going to get thoroughly cruelly difficult. In practical, the court issues an injunction as the main form of this personal. [4]But it is not easy to gain equitable remedies, the plaintiff need to uphill battle to obtain.
Curtice Brothers Co. v.Catts
Catts entered into agreement to purchase the whole tomato crop of a certain piece of land for tomato canning company Curtice Brothers Co. that had a capability of 1 million cans of tomatoes and the tomato packing season lasted 6 weeks. Curtice Brother had planned to product the tomato canning during the six week packing season. Curtice Brothers want to obtain specific performance. Catts contend the authority of the court to award specific performance. The Court of Chancery of New Jersey held that Curtice Brother engaged immense effort to secure a sufficient supply of tomatoes for efficient use of sources in its canning production and specific performance was a proper remedy.
Northern Indianna Public Service Co. v. Carbon County Coal Co.
NIPSCO and Carbon County concluded a 20-year agreement under which NIPSCO agreed to purchase around 1.5 million tons of coal every year for 20 years, at a price of $24 a ton, subject to increasing escalation. In 1985, the agreement price rose to $44 per ton but there were changing of the economic circumstances; NIPSCO could not buy electricity at the price lower than the cost of generation. NIPSCO searched for a declaratory judgment to excuse from the contract. Carbon County counterclaimed for breach of agreement and shift for a preliminary injunction and specific performance. The district court awarded the preliminary injunction but, court refused specific performance. NIPSCO appealed from the verdict and Carbon County appealed from the refutation of specific performance. The court speaking through Judge Posner, first affirmed the verdict against NIPSCO.
This case has the important issue that should be consider:
(i)The defendant only wanted damages; they did not prefer to do a performance which cost more than $181 million. The defendant can breach of contract but they have to bare consequences either damage for $181 million or specific performance. Nonetheless, the specific performance was no granted. Because the court believed that even if they grant the specific performance, the defendant still did not perform the contract and it is possible that when the plaintiff has been given a right, the plaintiff could claim the performance against the defendant but the defendant could pay money to the plaintiff not to exercise this specific performance right.
(ii) The denial of courts to issue injunctions that would compel an undue hardship on defendants has the effect of preventing the plaintiff from applying an equitable remedy to force an over compensatory settlement. But repudiating to award an injunction on such equitable bases also increases the chance plaintiffs will be under compensated by monetary damage.[5]
5) Liquidated damages
Liquidated damages are damages whose the parties determinate during the formation of an agreement for the injured party to obtain as compensation on a specific breach for the example: late performance. In case that the damage is not predetermining, the court will make a decision. However, a liquidated damage cannot be enforceable if it has an objective to punish the breach party.[6]
6) Other remedy
Uniform Commercial code 2000, we can find several remedies on part 7 which is the modern and broadly recover the right of injury for the example:
section 2-703 provided “Seller’s Remedies in General
Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (Section 2-612),then also with respect to the whole undelivered balance, then also with respect to the whole undelivered balance,the aggrieved seller may
(a) withhold delivery of such goods:
(b) stop delivery by any bailee as hereafter provided (Section 2-705)
(c) proceed under the next section respecting goods still unidentified to the contract
(d) resell and recover damages as hereafter provided (Section2-706)
(e) recover damages for non-acceptance (Section 2-708) or in a proper case the price (Section -709)
(f) cancel
Or section 2-712 “Cover”;Buyer’s Procurement of Substitute Goods
(1)After a breach within the preceding section the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.
(2)The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined(section 2-715),but less expenses saved in consequence of the seller’s breach.
(3)Failure of the buyer to effect cover within this section does not bar him from any other remedy.
In conclusion, the contractual remedies are not the pecuniary measure like compensation because the goal of law is to prevent the non-breach party from additional loss such as suspends performance or cancel. Some measure designed for deter the party who is malice. Nonetheless, the real goal of contract law is “Pacta sunt servanda” (agreement must be keep).If there are too many person who breach of contracts, it will destroy the economics of the country. Therefore each contractual remedy relieve and restore the damage of injury party from the breach at the same time, it enforce both parties to respect the contract.
[5] Ian Ayres and Kristin, Threatening Inefficient Performance of Injunctions and Contract, University of Pennsylvania Law Review,1999,P.35-36
ไม่มีความคิดเห็น:
แสดงความคิดเห็น