H418/04 - Equitable and consumer remedies

Specific performance

Specific performance is a court order requiring a party to carry out its contractual promise. It is an equitable remedy: the court exercises a principled discretion rather than awarding it automatically whenever breach is proved. The claimant must show, among other things, that damages would be inadequate.

Replacing ordinary market goods usually makes money adequate. A unique painting, or a particular piece of land, may be impossible to replace with an equivalent purchase, making specific performance more suitable. Uniqueness supports the argument but does not eliminate other limits. An uncertain, impossible or unfairly oppressive order may be refused; equitable relief also requires appropriate conduct from the claimant, including absence of inequitable delay or wrongdoing relevant to the relief.

Beswick v Beswick (1968) illustrates inadequate damages. A nephew received a business in return for promises including payments to the uncle's widow. After the uncle's death the nephew failed to continue the payments. The widow, acting as the estate's administratrix, obtained specific performance: nominal damages to the estate would not secure the intended payments. Her representative capacity mattered to the historical decision. Do not infer that every intended beneficiary today lacks personal rights; legislation on third-party rights has since changed that area.

In Co-operative Insurance v Argyll Stores (1998), a supermarket closed despite a promise to keep trading. The House of Lords refused to order it to run the business. Such an order would create continuing supervision and dispute, threatened contempt proceedings and potentially oppressive losses. The promise remained enforceable through the appropriate damages remedy; refusal of specific performance did not approve the breach.

Original comparison: delivery of an identified unique sculpture is a relatively definite act. An order to “run this shop successfully for ten years” involves ongoing business decisions and difficult supervision. The first has a stronger case for equitable enforcement; the second requires careful attention to the Argyll limits. Explain the practical adequacy of damages and feasibility of the order rather than merely naming equity.

Injunctions and their limits

An injunction orders a person to stop an act or, in an appropriate case, to take an act. A prohibitory injunction restrains conduct, such as disclosure in breach of an enforceable confidentiality promise. A mandatory injunction requires action, for example undoing a particular prohibited alteration. Both are equitable court orders; ignoring an order can lead to contempt sanctions.

For contractual relief, identify the enforceable promise, the actual or threatened breach, the adequacy of damages, and whether a sufficiently clear and just order can be made. A threatened sale of a unique contracted object to somebody else may call for a restraint before money can adequately compensate. A promise not to publish confidential designs may support an injunction where disclosure would cause difficult-to-measure harm. By contrast, simply labelling an ordinary payment dispute “urgent” does not establish inadequate damages.

An injunction is not a device to evade the limits on specific performance. Argyll Stores concerned an injunction in form requiring continued trading, but the same practical objections to compelling ongoing performance applied. Look at what an order actually forces a person to do.

For employment contracts, section 236 of the Trade Union and Labour Relations (Consolidation) Act 1992 expressly prevents either specific performance or an injunction from compelling an employee to work or attend a place for work. A suitably lawful negative restriction may sometimes be enforced, but an order effectively forcing the person back to work is not rescued by negative wording. Its scope, effect and any restraint-of-trade issues require scrutiny. Do not assume every contractual non-compete promise is valid.

Equitable discretion can prevent practical injustice but makes advice less certain than “breach means an order”. A sound argument considers a narrower effective restraint, the risk of harm and the defendant's freedom, instead of demanding enforcement at any cost.

Rejecting faulty goods

The Consumer Rights Act 2015 supplies rights in a qualifying trader–consumer contract. A trader acts for purposes related to business, craft or profession; a consumer is an individual acting wholly or mainly outside their own business. A private sale between two individuals or a company's business purchase does not automatically use these consumer remedies. Here we examine physical goods and services; digital-content remedies have a separate statutory structure.

For ordinary goods which breach the quality, fitness or description requirements, sections 19, 20 and 22 provide a short-term right to reject. The consumer can reject and treat the contract as ended for the goods, obtaining a refund, rather than first having to accept repair. Not every kind of contractual complaint has precisely this route: faulty trader installation alone has repair/replacement and later remedies under section 19(4), while breach of the right to supply has a distinct rejection right.

The usual limit is 30 days beginning with the first day after ownership or relevant possession has transferred, delivery has occurred, and, if installation or enabling action is required from the trader, the trader has notified completion. All applicable triggers must have happened; ordering or paying does not alone start the period. Goods reasonably expected to perish sooner have a shorter period. A trader cannot impose a shorter statutory rejection period, though a later exercise can be agreed.

If the consumer requests or agrees to repair/replacement, the short-term clock stops for the waiting period. If the returned goods still do not conform, the time to reject is at least seven days after the waiting period, or the original deadline extended by that period if later. Giving a reasonable repair opportunity matters; agreeing to repair is not permission to erase the remaining right.