Remedies for Breach of Contract

The assignment discusses various forms of remedy that an injured party may avail in case of a breach of contract. The remedies are based on the circumstances of the situation, with six kinds available to the aggrieved party: damages, rescission, repudiation, injunctions, specific performance, and restitution. The document references several court cases, including Addis v Gramophone [1909] AC 488, Long v Lloyd [1958] 1 WLR 753, Poussard v Spiers (1876) 1 QBD 410, Page One Records v Britton [1968] 1 WLR 157, and Cohen v Roche [1927] 1 KB 169. The assignment concludes that in the given situation of misrepresentation by the art gallery Annabelle, the party has the right to rescind the contract.

Running head: BUSINESS LAWS
Business Laws
Name of the student
Name of the university
Author note

1
BUSINESS LAWS
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................5
(a).................................................................................................................................................5
b)..................................................................................................................................................7
c)...................................................................................................................................................8
d)..................................................................................................................................................9
References......................................................................................................................................11

2
BUSINESS LAWS
Question 1
1.
Common law and equity are branches of law which have not been created through express
legislations. Thus knowing the difference between both the laws is necessary. Common laws are
those laws which exist in the legal words due to the rulings made by the courts. Common law is
based on those rulings which have been made by the judges in older cases. Other terms by which
common law is known are case laws and precedent. On the other hand the branch of law whose
development had been done to supplement rigid statute law which may lead to hardship in
relation to the outcome is called equity. According to McKendrick (2014) the branch of law in
which punishment is decided based on the elements of fairness and justice after taking into
consideration the overall circumstances which includes motive behind the wrongful act or
offence is known as equity.
The primary differences between the branches of law are as follows:
 Common law originates from the decision which had been made by the judges in older
cases and is binding in the present cases having similar facts in from of precedents. The
judges of a lower court have to abide by the precedent set by a superior court. On the
other hand equity is made up of general principles of justice and fairness which
supplements and statutory common law in certain circumstances.
 To make it simple equity can be defined as a form of relief which are not available within
the scope if common law or legislative law. On the other hand common law is legal
principals itself.

3
BUSINESS LAWS
 Equity relies upon good faith, reasons, fairness and justice. On the other hand common
law comprises of the application precedent laws to present issues.
2. Postal rule and its exceptions
The postal rule is a rule which has been provided in relation to the situation where the
communication of acceptance has been attempted to be done through post. The provisions in
relation to the rule had been first coined in the 19th century in the case of Adams v Lindsell
(1818) B & Ald 681. The rule had been further reaffirmed in the case of Dunlop v Higgins
(1848) 1 HL Cas 381 followed by Carriage Accident Insurance Co Ltd v Grant (1879) 4
Ex D 216 and then the case of Henthorn v Fraser [1892] 2 Ch 27. The rule is applicable
only in relation to acceptance and not any other contractual letters. In this case the plaintiff
had posted the letter of acceptance but the letter had not reached the offeror within the
prescribed time stated in the offer. In this case the court ruled that it would cause hardship to
the plaintiff where acceptance would be held as completed when the letter actually reaches
the offeror as the letter has already gone beyond the control of the offeree. Thus the court
ruled that as soon as the letter has gone beyond the reach of the acceptance such as when it
has been posted the acceptance is said to be formed.
Thus when a letter of acceptance has been posted by the offeree it is regarded as a valid
acceptance even if the letter reaches its intended destination after the stipulated time or it
does not reach the destination at all.
There are a few exceptions to the postal rule:

4
BUSINESS LAWS
Firstly, it had been held in the case of Re London and Northern Bank 1900 that the postal
rule is not applicable when the letter of acceptance has not be posted in a proper manner.
Here the letter of acceptance had been handed to a postman who only had the authority of
delivering not collecting letter.
Secondly, in the case of Henthorn v Fraser 1892 the court ruled that the postal rule is not
applicable where post is not considered as a usual communication method. The rule is also
not applicable where postal acceptance is expressly prohibited. The postal rule is not
applicable when the letter has been incorrectly addressed.
3.
Part consideration and exceptions
In the Pinnel's Case (1602) 5 CoRep 117a It had been ruled by the court that when a person
owes money to another person and a part payment has been made signifying full and final
settlement it is not considered as a good consideration under common law. For instance
where X owes Y $30 and Y accepts $20 as a full settlement there is nothing in law which
would prevent her from claiming the additional $10 latter as no consideration has been
provided in relation to accepting the lesser payments. This is because an already existing
obligation at law is present on X through which he is bound to make full payments to Y.
However as provided in the case of London Property Trust Ltd v High Trees House Ltd
[1947] 1 KB 130 the part payment will be accepted as a valid consideration if any additional
consideration has been provided. For instance the lesser payment made by X is added with a
book it would be a valid consideration. The doctrine of “accord and satisfaction” is also an

5
BUSINESS LAWS
exception which takes place in relation to unliquidated debts. Here the agreement to
discharge the obligation is the accord and the consideration is the satisfaction,
In the case of Hirachand Punamchand v Temple [1911] 2 KB 330 it has held by the court
that where a third party has made the part payment it would be a binding agreement as a
consideration is present.
As provided by Wood v Robarts (1818) compensation agreements at the time which the
company is wound up are also binding in the parties to the agreement.
Question 2
(a)
Issue
Whether the discussion which took place between Chris and Annabelle accounted to a valid offer
and acceptance
Rule
Offer and acceptance are two of the four primary elements which are required to form a valid
contract. In relation to an offer the judges in Gibson v Manchester City Council [1979] 1 WLR
294 have provided a ruling that a valid offer has to be “unambiguous and sufficient” otherwise
it cannot be regarded as an offer at all. An invalid offer is an invitation to treat. In the same way
invitation to treats also cover advertisements as ruled in the case of Partridge v Crittenden
[1968] 2 All ER 421. In this case the court ruled that goods which are displayed in the shop for
the purpose of advertisements are considered as invitation to treat.

6
BUSINESS LAWS
Provisions in relation to a valid acceptance and a counter offer have been ruled in the case of
Hyde v Wrench [1840] EWHC Ch J90. In this case the issue before the court was to determine
whether a valid acceptance has been made by the party or not. in the case an valid offer had been
made for the sale of a farm for 1000. The offeree made an offer to purchase the farm at 900. The
offer of the offeree was considered as a counter offer as it was not a mirror image of the original
offer and contained different provisions relating to the price. The counter offer rejects the
original offer. Thus the offer which had been made to sell the farm at 1000 is now no longer
available to be accepted.
Application
It has been provided through the scenario that Annabelle had visited the Millennium art gallery.
She had been found to have interest in a collection of 7 paintings which had been described as
being painted by Lowry along with having a price tag of $550,000. It can be stated that in this
situation the paining is also like goods which are displayed in a shop for advertisements and thus
it is an invitation to treat made by the Millennium Art Gallery as per the provisions of Partridge v
Crittenden.
An discussion had been made between Annabelle and the manager of Millennium that she wants
to purchase the paintings at a price of $450,000. This discussion between them would be
regarded as an offer as the expression is sufficient and unambiguous as per the provisions of
Gibson Case.
In reply it had been stated by the manager that he wants to sell the painting at a price of 500,000.
This discussion accounts to a counter offer as it has altered the term in relation to the price of
450000 and is unequivocal.

7
BUSINESS LAWS
The counter offer of 500000 has been followed by another counteroffer which has been made by
Annabelle where she has again altered the price to 480000. This means that the offer of 500000
is no longer eligible to be accepted as it has been rejected by the counter offer.
An offer was made by Annabelle to purchase the paintings at 500000 which had been accepted
by the manager when he purchased the painting from Benjamin and sold it to Annabelle. At this
time the offer and acceptance took place.
Conclusion
Thus the offer and acceptance had been concluded between Annabelle and the manager as per
the above discussion
b)
Along with the elements of offer and acceptance, the element of consideration and intention of
creating a legal obligation is also required for the purpose of establishing the formation of a valid
contract. The elements are discussed in this part of the paper in the light of the situation which
took place between Annabelle and the manager for the purchase of the painting.
As stated by Knapp et al. (2016) a contract cannot be formed until a valid consideration is found
to be present in the agreement between the parties. Consideration is payment of compensation or
money which is received by the party upon entering into a contract. The consideration must be
something which is of a value. It is a promise of an act or omission which is provided against the
act or omission done on the part of the other party to the contact. In this case the consideration
for the manager has been the price which has been paid by Annabelle in relation to the painting
and the consideration for Annabelle has been the paintings of Lowry bought against the price of
500000.

8
BUSINESS LAWS
Another element which is required to form a contract is the intention of creating a legal
obligation. As per this element the parties to the contract must have the intention of legally
binding each other to the agreement to be formed between them and thus acknowledging their
legal right and obligations under the contract. In the case of Edwards v Skyways Ltd [1964] 1
WLR 349 it had been stated that ICLR is presumed to be present in a commercial agreement. On
the other hand in the case of Balfour v Balfour [1919] 2 KB 571 it had been stated that
domestic relationships do not have the intention of creating a legal relation however the parties
can rebut the presumption. As the contract between Annabelle and Managers is a commercial
dealing ICLR is presumed to be present. ICLR is also determined through the application of the
objective test as done in Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
c)
A term of a contract is a provisions which has been incorporated into the contract either in an
express or implied way by the parties to the contract. A term of a contract has a legally binding
effect on the parties to the contract. On the other hand a representation is a statement which is
made by one of the parties to let the other party known about a product or a service. A
representation does not have a legally binding effect on the parties to the contract. A person is
not reasonable expected to rely on a representation or a mere puff to get into a contract. However
there are specific legal provisions in place to determine whether a statement made by a party is a
term or a mere representation. The appropriate remedy and cause of action can be known after it
is analyzed that a statement is a term or a representation.

9
BUSINESS LAWS
There are four rules which are in place to determine whether a statement is a term or a
representation. These are
The parole evidence rule – As per this rule when an oral contract has been documented all the
statements which are written in the contract are contractual terms and anything else which is not
included has no value.
Time of incorporation- in the case of Routledge v Mckay [1954] 1 WLR 615 it had been ruled
by the court that the longer the time between the statement and the formation of a contract the
more chances is that it is a representation.
Relative expertise of parties- in Oscar Chess v Williams [1957] 1 WLR 37 the court ruled that
where there is greater knowledge on the part of the representator the statement is a term and
conversely it is a representation if the representee has more knowledge.
Importance of the statement- in the case of Bannerman v White (1861) 10 CBNS 844 it had
been state by the court that whether the importance of the statement has been represented by the
representee to the representor it is to be a term of the contract.
d)
There are various forms of remedy which an injured party may avail in case of a breach of
contract. The remedies to bee provide to the party are based on the circumstances. There are six
kinds of remedies which are available to the aggrieved party:
 Damages – as provided in Addis v Gramophone [1909] AC 488 damages are provided
to the aggrieved party to return its position prior to the formation of the contract.
Damages are only available where an actual loss is suffered by the party to the contract.

10
BUSINESS LAWS
 Rescission- this remedy is provided to the parties in case if situation like undue influence,
duress or misrepresentation. Recession is provided in from of a equitable remedy solely
on the judge’s discretion. A remedy of recession has been provided by the court in the
case of Long v Lloyd [1958] 1 WLR 753. Here the contract is ended at the option of the
aggrieved party.
 Repudiation- repudiation signifies end of contract and is provided as a remedy when the
other party has violated a condition of the contract rather than warranty. the court
provided a remedy of repudiation in the case of Poussard v Spiers (1876) 1 QBD 410
 Injunctions- injunctions is an order to prevent a party from doing something and are
provided by the judges as an equitable remedy based on their discretion as it was done in
Page One Records v Britton [1968] 1 WLR 157
 Specific performance- In this remedy the judge orders the other party to carry out a
specific act and is provided when other remedies are not adequate to compensate the
party as it was done in the case of Cohen v Roche [1927] 1 KB 169
In the given situation as misrepresentation has been done by the art gallery Annabelle has the
right of rescinding the contract.

11
BUSINESS LAWS
References
Adams v Lindsell (1818) B & Ald 681
Addis v Gramophone [1909] AC 488
Balfour v Balfour [1919] 2 KB 571
Bannerman v White (1861) 10 CBNS 844
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216
Cohen v Roche [1927] 1 KB 169
Dunlop v Higgins (1848) 1 HL Cas 381
Edwards v Skyways Ltd [1964] 1 WLR 349
Gibson v Manchester City Council [1979] 1 WLR 294
Henthorn v Fraser [1892] 2 Ch 27
Henthorn v Fraser 1892
Hirachand Punamchand v Temple [1911] 2 KB 330
Hyde v Wrench [1840] EWHC Ch J90.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.

12
BUSINESS LAWS
London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130
Long v Lloyd [1958] 1 WLR 753
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Oscar Chess v Williams [1957] 1 WLR 37
Page One Records v Britton [1968] 1 WLR 157
Partridge v Crittenden [1968] 2 All ER 421
Pinnel's Case (1602) 5 CoRep 117a
Poussard v Spiers (1876) 1 QBD 410
Re London and Northern Bank 1900
Routledge v Mckay [1954] 1 WLR 615
Wood v Robarts (1818)

13
BUSINESS LAWS