Week 9: ENFORCEMENT OF
OBLIGATIONS: JUDICIAL REMEDIES
Thursday, 27 August 2020
13:44
Week 9: ENFORCEMENT OF OBLIGATIONS: JUDICIAL REMEDIES
we have been considering the defensive remedies open to an innocent
party in the event of breach. We now turn to examine the enforcement
remedies available at law, i.e. through court remedies.
Self help remedy risky but enables quick response
Judicial remedies: time consuming; instruct action, summons, duration of
case
Starting them used as way to force other party into settlement
A. ACTION FOR DEBT
Most common action arising out of contract is action for the payment of
money. Seeking contract price, whether for goods sold and delivered, or
for services rendered.
Law orders performance
Interest may be claimed:
Late Payment of Commercial Debts (Interest) Act 1998
Interest from right of action/date of demand for payment/date of
citation/date of decree
(longer failure to pay the more the debt is worth)
Vast majority of cases court issues decree of payment for
debt (most debtors don’t have money to pay) then leading to
diligence if not paid (judicially ordered seizure of debtors
assets and transfer to creditor)
Most debt actions undefended
Ultimate diligence is bankruptcy; all debtors get dividend
Cases raised in sheriff court up to £100,000; quite commonly
not followed through to formal disposal
Implied term; rights to business to claim simple interest at
fixed rates well above market rate by order on late payments
of debt by other businesses and public sector. Parties may
contract out of regime after debt has been created but any
attempt to do so before the debt is created is void unless
substantial remedy is provided for late repayment. Terms
providing for postponement must be reasonable
Various statutory provisions enable debtor (in exceptional
circumstances) to claim to be victim of an 'extortionate credit
bargain' and seek judicial revision of the contract accordingly.
Interest may also be due by statute
Rebuttable common law prosumption interest exists from date
of loan until date of repayment; interest also due on money
'wrongfully withheld'; creditor has made judicial demand for
payment, but debtor continues not to pay
B. SPECIFIC IMPLEMENT (performance of the contract)
*MacQueen & Thomson, ch 7.6 – 7.11 (4th edn paras 6.6-6.11)
, Relatively rarely sought remedy: takes long time (instead look for
damages)
A positive judicial remedy to try to secure performance (cf. the case of a
negative obligation by interdict: Church Commissioners v Abbey National
plc 1994 SC 651; 1994 SLT 959).
Everything except money debt.
Failure to obey such a decree is contempt of court punishable by up to 6
months civil imprisonment (Law Reform (Misc Prov) (Scotland) Act 1940 s
1).
Not useful for companies against other companies; who do
you imprison ?
Remedy is right/ entitlement of innocent party; no right in
English specific performance
Implement is in theory the primary remedy to which the innocent party is
entitled (contrast English law).
But the court retains an equitable power to refuse the remedy. Apart from
considerations of hardship specific implement will not be granted:
(a) to enforce an obligation to pay money (because otherwise it
would result in imprisonment for civil debt).
(b) to enforce a contract involving a personal relationship (because
this would be an undue restraint on personal liberty). But note
Anderson v Pringle 1998 SLT 754 (interdict against non-contractual
disciplinary procedures); see also Employment Rights Act 1996, ss
113-117 (employment tribunal can order reinstatement).
(c) where decree unenforceable or performance impossible or
cause undue hardship to debtor outweighing the benefit to the
creditor
(d) where the subject matter is of no special significance in itself
and money compensation would be adequate.
Meaning remedy is used sparingly and in particular situations, e.g. house
sales, restrictive covenants. Common to sue for implement with
alternative of damages.
Long leases to company; tenant will carry out development
and attract business to themselves and other outlets;
business decline and risk of insolvency because of less
business so withdrew from contract early in breach of the
contract. Anchor tenants: supermarket or bank; withdrawal
would drop footfall.
Landlords "keep open" clause in leases; forced tenant to
continue trading as critical to viability of establishment; tenant
ordained by court to return to premises
Court issued specific implement but allowed parties to search
for alternative solutions.
Compel performance of missives by seller in a transfer of heritage
OBLIGATIONS: JUDICIAL REMEDIES
Thursday, 27 August 2020
13:44
Week 9: ENFORCEMENT OF OBLIGATIONS: JUDICIAL REMEDIES
we have been considering the defensive remedies open to an innocent
party in the event of breach. We now turn to examine the enforcement
remedies available at law, i.e. through court remedies.
Self help remedy risky but enables quick response
Judicial remedies: time consuming; instruct action, summons, duration of
case
Starting them used as way to force other party into settlement
A. ACTION FOR DEBT
Most common action arising out of contract is action for the payment of
money. Seeking contract price, whether for goods sold and delivered, or
for services rendered.
Law orders performance
Interest may be claimed:
Late Payment of Commercial Debts (Interest) Act 1998
Interest from right of action/date of demand for payment/date of
citation/date of decree
(longer failure to pay the more the debt is worth)
Vast majority of cases court issues decree of payment for
debt (most debtors don’t have money to pay) then leading to
diligence if not paid (judicially ordered seizure of debtors
assets and transfer to creditor)
Most debt actions undefended
Ultimate diligence is bankruptcy; all debtors get dividend
Cases raised in sheriff court up to £100,000; quite commonly
not followed through to formal disposal
Implied term; rights to business to claim simple interest at
fixed rates well above market rate by order on late payments
of debt by other businesses and public sector. Parties may
contract out of regime after debt has been created but any
attempt to do so before the debt is created is void unless
substantial remedy is provided for late repayment. Terms
providing for postponement must be reasonable
Various statutory provisions enable debtor (in exceptional
circumstances) to claim to be victim of an 'extortionate credit
bargain' and seek judicial revision of the contract accordingly.
Interest may also be due by statute
Rebuttable common law prosumption interest exists from date
of loan until date of repayment; interest also due on money
'wrongfully withheld'; creditor has made judicial demand for
payment, but debtor continues not to pay
B. SPECIFIC IMPLEMENT (performance of the contract)
*MacQueen & Thomson, ch 7.6 – 7.11 (4th edn paras 6.6-6.11)
, Relatively rarely sought remedy: takes long time (instead look for
damages)
A positive judicial remedy to try to secure performance (cf. the case of a
negative obligation by interdict: Church Commissioners v Abbey National
plc 1994 SC 651; 1994 SLT 959).
Everything except money debt.
Failure to obey such a decree is contempt of court punishable by up to 6
months civil imprisonment (Law Reform (Misc Prov) (Scotland) Act 1940 s
1).
Not useful for companies against other companies; who do
you imprison ?
Remedy is right/ entitlement of innocent party; no right in
English specific performance
Implement is in theory the primary remedy to which the innocent party is
entitled (contrast English law).
But the court retains an equitable power to refuse the remedy. Apart from
considerations of hardship specific implement will not be granted:
(a) to enforce an obligation to pay money (because otherwise it
would result in imprisonment for civil debt).
(b) to enforce a contract involving a personal relationship (because
this would be an undue restraint on personal liberty). But note
Anderson v Pringle 1998 SLT 754 (interdict against non-contractual
disciplinary procedures); see also Employment Rights Act 1996, ss
113-117 (employment tribunal can order reinstatement).
(c) where decree unenforceable or performance impossible or
cause undue hardship to debtor outweighing the benefit to the
creditor
(d) where the subject matter is of no special significance in itself
and money compensation would be adequate.
Meaning remedy is used sparingly and in particular situations, e.g. house
sales, restrictive covenants. Common to sue for implement with
alternative of damages.
Long leases to company; tenant will carry out development
and attract business to themselves and other outlets;
business decline and risk of insolvency because of less
business so withdrew from contract early in breach of the
contract. Anchor tenants: supermarket or bank; withdrawal
would drop footfall.
Landlords "keep open" clause in leases; forced tenant to
continue trading as critical to viability of establishment; tenant
ordained by court to return to premises
Court issued specific implement but allowed parties to search
for alternative solutions.
Compel performance of missives by seller in a transfer of heritage
