Contractual Remedies in UK Law

It is important to remember that any clause in a contract must be construed in the context in which one finds it, both the immediate context of the other terms and the wider context of the transaction as a whole. The court is unlikely to be satisfied that a party to a contract has abandoned valuable rights arising by operation of law unless the terms of the contract make it sufficiently clear that that was intended. The more valuable the right, the clearer the language will need to be.

If a construction contract is abandoned or terminated, the employer is in new territory for which the liquidated damages clause may not have made provision. It may be more logical and more consonant with the parties' bargain to assess the employer's total losses flowing from the abandonment or termination, applying the ordinary rules for assessing damages for breach of contract.

Both counsel accept that there are difficulties with the second and third sentences of Article 12.3, whichever interpretation is correct. I have come to the conclusion that the appellant's construction is preferable. Sentence 3 is dealing with specific remedies for individual breaches. Accordingly sentence 3 of Article 12.3 contains a specific exclusion for delay breaches.

Take the example of a contractor who has wholly failed to comply with the contract, is in considerable delay, and is facing a notice of termination. If the defendant was right, the contractor would be better off not coming back on site to carry out the works because, if he refused to do so, the contract would then be terminated and his liability to pay liquidated damages would automatically come to an end.

"In my judgment, the essential characteristic of exchange of contracts is that each party shall have such a document signed by the other party in his possession or control so that, at his own need, he can have the document available for his own use. Exchange of a written contract for sale is in my judgment effected so soon as each part of the contract, signed by the vendor or the purchaser as the case may be, is in the actual or constructive possession of the other party or of his solicitor.

In a proper case damages for mental distress can be recovered in contract, just as damages for shod: can be recovered in tort. One such case is a contract for a holiday, or any other contract to provide entertainment and enjoyment. If the contracting party breaks his contract, damages can be given for the disappointment, the distress, the upset and frustration caused by the breach.

(3) Is C also liable to A in respect of that damage or some of it?