The most usual relief which one has against another for breach of contract is an action for damages in a court of law. And wherever there is a breach of contract, the other party not being in default himself, may maintain his action for damages.
Where a breach of contract occurs, the usual remedy and in most cases the only remedy, is by way of an action in the court for damages. And this action always arises in every case where there has been a breach by one party, not waived by the other party, and the other party is not in default himself.
Damages in contract cases may be referred to as nominal or actual. Nominal damages are given upon breach where no actual damages are proved. Actual damages are such damages as are actually sustained on account of the breach.
Where there is a breach of contract no actual damages may result. This is many times the case. A verdict for nominal damages would then be allowed and this would carry with it a right to have the costs of suit. Actual damages are such as really occur.
Those actual damages may be allowed which both parties at the time of the contract must be supposed to have contemplated as likely to result from breach. Remote, contingent and uncertain damages cannot be proved.
The actual damages sustained by one may not be allowed by the court. One may only have those damages which under the circumstances at the making of the contract must have been considered as likely to result if breach occurred. Thus, if one is under contract to erect a building, the purpose of the building, the use to which the builder knew the owner was to put it, whether it was to be used permanently or only temporarily, as for a fair, would all go to affect the result. The delay in the erection of some buildings causes no damage; the delay in the erection of others causes very much.
In the same way the breach of contracts of sales of personal property or for services, would result differently. Whatever both parties must be considered as having contemplated as damages will be allowed.183 This prevents the proof of remote damages.
Damages must also be reasonably certain. One cannot merely speculate on what his damages would have been. He must have some reasonably certain proof.
B. Bill for Specific Performance.
A bill for the specific performance will lie where (1) the court considers that damages would not be an adequate compensation, and (2) where the performance asked for is of such nature that it could be enforced by the court.
183. Hadley v. Baxendale, 9 Exch. 341.
The Court of Equity takes jurisdiction to enforce the specific performance of contract where it regards damages as the inadequate compensation, providing the performance sought could be enforced. A Court of Equity will not enforce the performance of a contract to work for another for a year, because it could not carry out its decree. It could not "stand over" the man and compel him to render the services. And even if it should try to do so it would be really sentencing the defendant to slavery. The kind of contracts whose performance a court will enforce are those contracts whose performance calls for the execution of a deed, a mortgage, a lease, etc. But if damages are considered adequate, it will not enforce performance. We may consider various classes of contracts.
A court will enforce a fair contract for the sale of real estate or for a lease or mortgage at the instance of either party, for it considers damages inadequate compensation for the loss of a particular piece of land.
If A contracts to sell B a certain parcel of land, B can secure a decree for specific performance, that is to say, the court will compel A to execute a deed; provided the contract on B's part was fair. This is on the theory that if B is confined to damages, his relief would be inadequate as there is no other piece of land like this one contracted for which B could buy with his damages.184
184. Cud v. Rutter, 1 P. Wms. 570.
As the law gives the remedy to a buyer, so it gives to a seller. Either can have specific performance.
Where this remedy exists there would also be a right to sue for damages at one's election.
A court will not usually enforce at the instance of either party a contract to sell personal property, for it considers damages an adequate remedy; but where the property has a peculiar or rare value, specific performance will be decreed.
If A sells B 1,000 bushels of wheat, B's damages for A's default will be an adequate remedy in the eyes of the law. The world is full of wheat, from which A's wheat cannot be identified, and therefore B may make himself whole. Or, if B's purpose was the profit he could have made, the judgment will be based upon that fact.
If personal property has a very peculiar or rare value the court will decree a specific performance of a contract to sell it. Thus a contract to sell a painting of historic value would be enforced; or corporate stock not to be had on the market, and which would have a peculiar value to the buyer.185
Of course, if in a contract of sale of personal property, title has passed, the buyer could secure it by a writ of replevin. That would not be a specific enforcement of the contract, but only allowing the buyer to have what was his own under the contract that had already been performed to the extent of conferring title.
185. P. & F. Corbin v. Tracy, 34 Conn. 325.
Contracts for personal services will never be specifically enforced.
Whether damages are adequate or not, the result is the same in this class of agreements. The court has no effective way to compel a man to perform personal services. It could not stand constant guard over him, seeing him perform. So the policy of the law would not permit it. The remedy for breach of contract for personal services is by way of action for damages.
C. Bill for Injunction.
A court of equity will enjoin a threatened breach of contract when such breach consists in doing something the party has covenanted not to do, and there is no adequate remedy for such breach by way of damages.
If a party to a contract has agreed as a part of such contract to refrain from entering into competition, or performing services, or making certain use of land, the Court will enjoin the breach, provided the breach would result in injury which damages could provide no compensation for.186
Thus, if one agrees not to use his land for certain purposes and is about to break his covenant in that regard, a Court of Equity will protect the other party by affording relief by way of injunction. So if one in selling out a business agrees to restrain his competition in a manner considered reasonable the court will enjoin him from breaking his contract. In such cases damages would be so hard to estimate that a court will not confine a party to his action for damages. A covenant not to work for any one else than the other party to the contract will sometimes be protected by injunction. But in such cases it must appear that the party whose services are contracted for, was of such skill or reputation that he could not be replaced and therefore damages would be inadequate. For example, A, an actor of great skill and reputation, appears to B's theater nightly for eight weeks, and agrees not to appear elsewhere during that period. The court will not grant a decree of specific performance, as we have seen, and B has no way he can compel A to appear at his theater. He is left to his action for damages. But he can secure an injunction against A appearing in any one's else theater, and this, perhaps, will have the incidental result of compelling A to perform at B's theater.
186. Phila. Ball Club v. La Joie, 202 Pa. State 210.