Umberto and Sam - Painting Case

Issue

As there was a contract between Sam and Umberto with respect to the paintings to be made, the issue of breach of contract and the remedy available to Sam arises. The basic issue in this is - whether Sam can avail of any equitable remedies, particularly specific performance, for breach of contract?

Rule

Where monetary compensation for breach of contract is inadequate, the court may allow equitable remedy to the plaintiff. Equitable remedies that may be applicable in this case is specific performance of contract.

Specific performance is used to denote the remedy available in equity to compel a person to actually perform a contractual obligation (Mc Kendrick 2012: 924). It is not necessary for the plaintiff to wait for the defendant to breach the contract, before applying to the court for this remedy. Under the order of specific performance, the court ensures that a defaulting party must adhere to the terms of the contract that they have entered into. Where a contract has a unique identity, the court may order specific performance, because monetary compensation may prove inadequate (Atkins 2015). Where damages will be inadequate to compensate the loss due to breach of contract, specific performance can be ordered by the court, instead of monetary damages. Thus, where the plaintiff cannot get an adequate substitute to the one agreed to in the contract (Cohen v Roche [1927] 1 KB 169); or where the award of damages will be unfair to the plaintiff (Beswick v Beswick [1968] AC 58) or even where the quantum is difficult to assess, the court may order specific performance of the contract.

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In Falcke v Grey, (1859) 4 Drew 651, the case involved sale of two exquisite china jars. Although the court did not make the order of specific performance due to the facts of the case, the Vice-Chancellor did remark that owing to the articles being of such rare beauty for which monetary damages cannot compensate, he would have ordered specific performance, if the facts of the case had not posed an objection to such an order (Mc Kendrick 2012: 928). Thus, where the subject matter of the contract is unique, the court may order specific performance of the contract. In Behnke v Bede Shipping Co., [1927] 1 KB 649, where the subject matter of the contract (ship) was of such unique value to the plaintiff, the court ordered specific performance.

In Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd, [1998] AC 1, among the other important principles laid down by the court with relation to specific performance of contracts, the court also reiterated that specific performance is an exceptional remedy. Where the court has to maintain a constant supervision over the defendant in order to ensure that the contract will be performed, the court will generally not order specific performance of the contract.

In CH Giles & Co Ltd v Morris, [1972] 1 WLR 307, 318, Megarry J has observed that the rule that contract for personal services or continuous service is not specifically enforceable, is not absolute or without exception. In cases, where the subject matter of the contract does not require supervision of the court, the court may order the specific performance of the contract. The principle of mutuality is also applicable in specific performance cases. In other words, the court will not order specific performance, unless the same remedy would also have been available against the person asking for it. It is to be remembered that the remedy of specific performance is discretionary in nature and the plaintiff is not entitled to it, merely because the defendant is on breach of the contract. Injunctions may also be ordered by the court in relevant cases.

In De Mattos v Gibson, (1858) 4 De G&J 276, the defendant was issued an injunction to stop him from acting contrary to the charter (Stone & Devenney 2015). Although this case involved immovable property the court held that the same principle could also be applied to private property. The court will not order injunction where specific performance cannot be ordered. Thus, in cases where there is some personal service involved, the courts do not issue injunctions or order specific performance. However as mentioned above, this is not an absolute rule.

Application

The contract for Umberto’s painting is unique because as a famous painter, his work cannot be substituted by anyone else. Therefore, there can be no monetary compensation that would be adequate to compensate Sam for the breach of the contract. Therefore, in this case, damages would not be an adequate remedy. As seen in the discussion above, specially in the decision of the court in Falcke v Grey, where the subject matter of the contract is unique, priceless and rare, the court would have no compunction in ordering specific performance of the contract. In this case, Umberto was to use the photographs of Naomi and paint her portrait. This is a unique subject matter. Moreover, the contract for a painting that Sam wants to gift to his wife for her 27th birthday. As she is an admirer of Umberto’s work, a painting by some other painter will not be a worthy substitute as a gift for Naomi. Therefore, specific performance of the contract can be ordered.

Conclusion

Sam can ask for the remedy of specific performance of the contract, instead of asking for damages. Damages will not compensate Sam for the loss suffered by him due to the breach of contract.

Bibliography

    1. Atkins S, Equity and Trusts, Oxford: Routledge, 2015.
    2. Bray J, A Student's Guide to Equity and Trusts, Cambridge: Cambridge University Press, 2012.
    3. Garton J, Moffat G, Bean G, Probert R, Moffats’ Trust Law, 6th ed., Cambridge: Cambridge
    4. University Press, 2015.
    5. Hudson A, Equity and Trusts, Oxford: Routledge, 2014.
    6. McKendrick E, Contract Law: Text, Cases, and Materials, Oxford: Oxford University Press, 2012.
    7. Stone, R, Devenney, J, The Modern Law of Contract, Oxford : Routledge, 2015.
    8. Watt G, Equity and Trusts Law Directions, Oxford: Oxford University Press, 2014.

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