ACCA F4 - Corp and Business Law (ENG)

Part B The law of obligations  6: Breach of contract and remedies 99

The phrase quantum meruit literally means 'how much it is worth'. It is a measure of the value of contractual

work which has been performed. The aim of such an award is to restore the claimant to the position they would

have been in if the contract had never been made, and is therefore known as a restitutory award.

Quantum meruit is likely to be sought where one party has already performed part of their obligations

and the other party then repudiates the contract.

De Barnardy v Harding 1853

The facts: The claimant agreed to advertise and sell tickets for the defendant, who was erecting stands for

spectators to view the funeral of the Duke of Wellington. The defendant cancelled the arrangement without

justification.

Decision: The claimant might recover the value of services rendered.

In most cases, a quantum meruit claim is needed because the other party has unjustifiably prevented

performance Because it is restitutory, a quantum meruit award is usually for a smaller amount than an

award of damages. However where only nominal damages would be awarded (say because the claimant

would not have been able to perform the contract anyway) a quantum meruit claim would still be available

and would yield a higher amount.

8 Equitable remedies

8.1 Specific performance

An order for specific performance is an equitable remedy. The party in breach is ordered to perform their

side of the contract. Such an order is only made where damages are inadequate compensation, such as in

a sale of land, and where actual consideration has passed.

The court may at its discretion give an equitable remedy by ordering the defendant to perform their part of

the contract instead of letting them 'buy themselves out of it' by paying damages for breach.

Specific performance can be defined as 'an order of the court directing a person to perform an obligation.

It is an equitable remedy awarded at the discretion of the court when damages would not be an adequate

remedy. Its principal use is in contracts for the sale of land but may also be used to compel a sale of

shares or debentures. It will never be used in the case of employment or other contracts involving

personal services.'

An order will be made for specific performance of a contract for the sale of land since the claimant may

need the land for a particular purpose and would not be adequately compensated by damages for the loss

of their bargain.

The order will not be made if it would require performance over a period of time and the court could not

ensure that the defendant did comply fully with the order. Therefore specific performance is not ordered

for contracts of employment or personal service nor usually for building contracts.

8.2 Injunction

An injunction is a discretionary court order and an equitable remedy, requiring the defendant to observe a

negative condition of a contract.

An injunction is a discretionary court order and an equitable remedy, requiring the defendant to observe a

negative restriction of a contract.

An injunction may be made to enforce a contract of personal service for which an order of specific

performance would be refused.

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