Law – 3 Law of contract | e-Consult
3 Law of contract (1 questions)
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Model Answer:
Legal damages are a monetary remedy intended to place the innocent party in the position they would have been in had the contract been performed. They are the primary remedy because they are flexible and can be quantified.
- Compensatory damages – aim to compensate for actual loss.
- Consequential (special) damages – cover loss flowing naturally from the breach.
- Nominal damages – awarded where a breach occurred but no loss was suffered.
- Punitive (exemplary) damages – rarely awarded in contract law, only where the breach is egregious.
Specific performance is an equitable remedy that orders the breaching party to perform their contractual obligations. It is discretionary and only granted when damages are an inadequate remedy.
- Appropriate where the subject matter is unique (e.g., land, rare goods, artistic works).
- Not granted where the contract is for personal services, as forcing performance would be oppressive.
- The court will consider whether the order is practicable and whether it would cause undue hardship.
In summary, damages are the default remedy, while specific performance is reserved for cases where monetary compensation cannot adequately address the loss.