100 6: Breach of contract and remedies Part B The law of obligations
Warner Bros Pictures Inc v Nelson 1937
The facts: The defendant (the film star Bette Davis) agreed to work for a year for the claimants and not
during the year to work for any other producer nor 'to engage in any other occupation' without the
consent of the claimants. She came to England during the year to work for a British film producer. The
claimants sued for an injunction to restrain her from this work and she resisted arguing that if the
restriction were enforced she must either work for them or abandon her livelihood.
Decision: The court would not make an injunction if it would have the result suggested by the defendant.
But the claimants merely asked for an injunction to restrain her from working for a British film producer.
This was one part of the restriction accepted by her under her contract and it was fair to hold her to it to
that extent.The scope of injunctions is limited to enforcement of contract terms which are in substance negative
restraints. They would not be made merely to restrain the defendant from acts inconsistent with their
positive obligations.8.2.1 Mareva or 'freezing' injunctions
The Mareva injunction is named from the case of Mareva Compania Naviera SA v International Bulkcarriers
SA 1975, but has been given statutory effect. If the claimant can convince the court that they have a good
case and that there is a danger of the defendant's assets being exported or dissipated, they may be
awarded an injunction which restricts the defendant's dealing with the assets.8.3 Rescission
Strictly speaking the equitable right to rescind an agreement is not a remedy for breach of contract – it is
a right which exists in certain circumstances, such as where a contract is voidable.
Rescinding a contract means that it is cancelled or rejected and the parties are restored to their pre-
contract condition. Four conditions must be met.
It must be possible for each party to be returned to the pre-contract condition (restitutio in
integrum).
An innocent third party who has acquired rights in the subject matter of the contract will prevent
the original transaction being rescinded.
The right to rescission must be exercised within a reasonable time of it arising.
Where a person affirms a contract expressly or by conduct it may not then be rescinded.Questions may ask whether a particular remedy, say specific performance, is appropriate in any given
situation.Exam focus
point