Disputes Contract

1 disputes

1.1 procedure

1.1.1 arbitration

1.1.1.1 united states


1.1.2 choice of law
1.1.3 choice of forum


1.2 remedies

1.2.1 damages
1.2.2 specific performance

disputes
procedure

in many countries, in order obtain damages breach of contract or obtain specific performance or other equitable relief, aggrieved injured party may file civil (non-criminal) lawsuit in court.

in england , wales, contract may enforced use of claim, or in urgent cases applying interim injunction prevent breach. likewise, in united states, aggrieved party may apply injunctive relief prevent threatened breach of contract, such breach result in irreparable harm not adequately remedied money damages.

arbitration

if contract contains valid arbitration clause then, prior filing lawsuit, aggrieved party must submit arbitration claim in accordance procedures set forth in clause. many contracts provide disputes arising thereunder resolved arbitration, rather litigated in courts.

arbitration judgments may enforced in same manner ordinary court judgments, , recognized , enforceable internationally under new york convention, has 156 parties. however, in new york convention states, arbitral decisions immune unless there showing arbitrator s decision irrational or tainted fraud.

some arbitration clauses not enforceable, , in other cases arbitration may not sufficient resolve legal dispute. example, disputes regarding validity of registered ip rights may need resolved public body within national registration system. matters of significant public interest go beyond narrow interests of parties agreement, such claims party violated contract engaging in illegal anti-competitive conduct or committed civil rights violations, court might find parties may litigate or of claims before completing contractually agreed arbitration process.

united states

in united states, thirty-five states (notably not including new york) , district of columbia have adopted uniform arbitration act facilitate enforcement of arbitrated judgments.

customer claims against securities brokers , dealers resolved pursuant contractual arbitration clauses, because securities dealers required under terms of membership in self-regulatory organizations such financial industry regulatory authority (formerly nasd) or nyse arbitrate disputes customers. firms began including arbitration agreements in customer agreements, requiring customers arbitrate disputes.

choice of law

when contract dispute arises between parties in different jurisdictions, law applicable contract dependent on conflict of laws analysis court breach of contract action filed in absence of choice of law clause, court apply either law of forum or law of jurisdiction has strongest connection subject matter of contract. choice of law clause allows parties agree in advance contract interpreted under laws of specific jurisdiction.

within united states, choice of law clauses enforceable, although exceptions based upon public policy may @ times apply. within european union, when parties have negotiated choice of law clause, conflict of law issues may governed rome regulation.

choice of forum

many contracts contain forum selection clause setting out disputes in relation contract should litigated. clause may general, requiring case arising contract filed within specific state or country, or may require case filed in specific court. example, choice of forum clause may require case filed in u.s. state of california, or may require more case filed in superior court los angeles county.

a choice of law or venue not binding upon court. based upon analysis of laws, rules of procedure , public policy of state , court in case filed, court identified clause may find should not exercise jurisdiction, or court in different jurisdiction or venue may find litigation may proceed despite clause. part of analysis, court may examine whether clause conforms formal requirements of jurisdiction in case filed (in jurisdictions choice of forum or choice of venue clause limits parties if word exclusive explicitly included in clause). jurisdictions not accept action has no connection court chosen, , others not enforce choice of venue clause when consider more convenient forum litigation.

some contracts governed multilateral instruments require non-chosen courts dismiss cases, , require recognition of judgements made courts having jurisdiction based on choice of court clause. example, brussels regime instruments (31 european states) , hague choice of court agreements convention (european union , mexico), several instruments related specific area of law, may require courts enforce , recognize choice of law clauses , foreign judgments.

remedies

in united kingdom, breach of contract defined in unfair contract terms act 1977 as: [i] non-performance, [ ii] poor performance, [iii] part-performance, or [iv] performance substantially different reasonably expected. innocent parties may repudiate (cancel) contract major breach (breach of condition), may recover compensatory damages, provided breach has caused foreseeable loss.

it not possible sue crown in uk breach of contract before 1948. however, appreciated contractors might reluctant deal on such basis , claims entertained under petition of right needed endorsed home secretary , attorney-general. s.1 crown proceedings act 1947 opened crown ordinary contractual claims through courts other person.

damages

there several different types of damages.

compensatory damages, given party detrimented breach of contract. compensatory damages, there 2 heads of loss, consequential damage , direct damage.
liquidated damages estimate of loss agreed in contract, court avoids calculating compensatory damages , parties have greater certainty. liquidated damages clauses may called penalty clauses in ordinary language, law distinguishes between liquidated damages (legitimate) , penalties (invalid). test determining category clause falls established english house of lords in dunlop pneumatic tyre co. ltd v. new garage & motor co. ltd
nominal damages consist of small cash amount court concludes defendant in breach plaintiff has suffered no quantifiable pecuniary loss, , may sought obtain legal record of @ fault.
punitive or exemplary damages used punish party @ fault; though such damages not intended compensate, nevertheless claimant (and not state) receives award. exemplary damages not recognised nor permitted in jurisdictions. in uk, exemplary damages not available breach of contract, possible after fraud. although vitiating factors (such misrepresentation, mistake, undue influence , duress) relate contracts, not contractual actions, , so, in roundabout way, claimant in contract may able exemplary damages.

compensatory damages compensate plaintiff actual losses suffered accurately possible. may expectation damages , reliance damages or restitutionary damages . expectation damages awarded put party in of position party have been in had contract been performed promised. reliance damages awarded no reasonably reliable estimate of expectation loss can arrived @ or @ option of plaintiff. reliance losses cover expense suffered in reliance promise. examples reliance damages have been awarded because profits speculative include australian case of mcrae v. commonwealth disposals commission concerned contract rights salvage ship. in anglia television ltd v. reed english court of appeal awarded plaintiff expenditures incurred prior contract in preparation of performance.

after breach has occurred, innocent party has duty mitigate loss taking reasonable steps. failure mitigate means damages may reduced or denied altogether. however, professor michael furmston has argued wrong express (the mitigation) rule stating plaintiff under duty mitigate loss , citing sotiros shipping inc v. sameiet, solholt. if party provides notice contract not completed, anticipatory breach occurs.

damages may general or consequential. general damages damages naturally flow breach of contract. consequential damages damages which, although not naturally flowing breach, naturally supposed both parties @ time of contract formation. example when rents car business meeting, when person arrives pick car, not there. general damages cost of renting different car. consequential damages lost business if person unable meeting, if both parties knew reason party renting car. however, there still duty mitigate losses. fact car not there not give party right not attempt rent car.

to recover damages, claimant must show breach of contract caused foreseeable loss. hadley v baxendale established test of foreseeability both objective or subjective. in other words, foreseeable objective bystander, or contracting parties, may have special knowledge? on facts of case, miller lost production because carrier delayed taking broken mill parts repair, court held no damages payable since loss foreseeable neither reasonable man nor carrier, both of whom have expected miller have spare part in store.

specific performance

there may circumstances in unjust permit defaulting party buy out injured party damages. example, art collector purchases rare painting , vendor refuses deliver, collector s damages equal sum paid.

the court may make order of called specific performance , requiring contract performed. in circumstances court order party perform or promise (an order of specific performance ) or issue order, known injunction , party refrain doing breach contract. specific performance obtainable breach of contract sell land or real estate on such grounds property has unique value. in united states way of 13th amendment united states constitution, specific performance in personal service contracts legal punishment crime whereof criminal shall dully convicted.

both order specific performance , injunction discretionary remedies, originating part in equity. neither available of right , in jurisdictions , circumstances court not order specific performance. contract sale of real property notable exception. in jurisdictions, sale of real property enforceable specific performance. in case defenses action in equity (such laches, bona fide purchaser rule, or unclean hands) may act bar specific performance.

related orders specific performance, injunction may requested when contract prohibits action. action injunction prohibit person performing act specified in contract.