Contract plays a significant role in any conveyancing process. Exchange of contracts can be considered a significant landmark in the process of conveyancing. Once both parties have agreed to their respective terms and conditions, everything is recorded in the form of writing, in a contract. Both the buyer and seller are not supposed to withdraw from this contract after the exchange. If the promises are not honored by any of the parties, it is considered to be a breach of contract.
Remedies for breach of contract
There are several remedies to save the innocent party, during an occurrence of breach of contract in a conveyancing process. The remedy will depend upon different factors like the seriousness of the breach, the loss incurred by the innocent party, the type of breach etc.
There are many types of breaches like minor breach, material breach, immaterial breach, fundamental breach etc.
The Conveyancing laws have clear distinctions between them all.
Anticipatory Repudiation
Apart from this, rarely, some people might opt for an anticipatory repudiation of a contract. According to this, a party makes a clear indication that they will not abide to promises mentioned in the contract, when the performance of the other party is due or in a situation in which the non-performance of the party is foreseeable.
Monetary Damage
However, the court typically awards monetary damages as a remedy for breach of contract. These are generally compensatory. The damages aim to put back the party to the previous position, that is, in the position before the occurrence of the breach. The damages can be general or consequential. When damage directly flows from a breach, it is called general damage. On the other hand, when a breach is agreed by both the party at the time of framing the contract, it is called consequential breach.
Unliquidated damages
If a breach of contract occurs, the innocent party may have to suffer some kind of losses. In such cases, he / she can go to court. Once the innocent party is able to prove his loss in front of the court, the court will assess the value of loss and order for compensation. This is called unliquidated damages. On the other hand, if you fail to prove it in front of the court, you will not be entitled for any compensation.
Loss generally includes any harm to the claimant or any damage to their property. The value reduction of the property will also be calculated as the loss. However, if the claimant has enjoyed any befit from the breach of the contract, they will not be considered for the compensation.
Liquidated damage
In certain cases, both the parties will fix a sum which should be paid upon breach of contract. This is known as liquidated damages. The court will check whether this pre estimated amount is genuine. If it is not genuine, then the court will consider this as “penalty” and it will not be enforced. Else, the court will award an unliquidated damage.
Equitable remedies
In all cases the monetary damages may not be sufficient. The court may decide on equitable remedies in such situations. It may include specific performance or injunction.
Specific Performance
In specific performance, the court orders to complete the contract. The purpose of this method is to put both parties in a position where they would have been, if the breach of contract had not happened.
Injunction
Injunction, on the other hand, is an order in which the court either insist to do or not do a specific action. Injunctions can be categorized into three:
1) Prohibitory Injunction
This prohibits the defendant from doing an action.
2) Mandatory Injunction
This insists that the defendant perform an action.
3) Interlocutory injunction
This regulates the actions of both the parties.
However, when a breach of contract occurs, generally the claimant gets compensated with monetary damages. The losses are generally decided by the clients themselves, though the final statement is made by the court.
