English Contract Law - Conclusion and Remedies

Conclusion and Remedies

Although promises are made to be kept, parties to an agreement are generally free to determine how a contract is concluded, can be terminated and remedial consequences for breach of contract, just as they can generally determine a contract's content. The courts have fashioned only residual limits on the parties' autonomy to determine how a contract concludes. The courts' default, or standard rules, which are generally alterable, are first that a contract is automatically concluded if it becomes impossible for one party to perform. Second, if one party breaches her side of the bargain in a serious way, the other party may cease his own performance. If a breach is not serious, the innocent party must continue his own obligations but may claim a remedy in court for the defective or imprecise performance he has received. Third, the principle remedy for breach of contract is compensatory damages, limited to losses that one might reasonably expect to result from a breach. This means a sum of money to put the claimant in mostly the same position as if the contract breaker had performed her obligations. In a small number of contract cases, closely analogous to property or trust obligations, a court may order restitution by the contract breaker so that any gains she has made by breaking the agreement will be stripped and given to the innocent party. Additionally where a contract's substance is for something so unique that damages would be an inadequate remedy courts may use their discretion to grant an injunction against the contract breaker doing something or, unless it is a personal service, positively order specific performance of the contract terms.