Law of conveyance ass- Oyelade bukunmi
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Name : Oyelade Bukunmi Oyelola MATRIC NO: LAW/2020/2006COURSE: LAW OF CONVEYANCE Assignment: Remedies aim to provide relief, enforce the terms of the contract or compensate forlosses incurred due to the breach. With this in mind, discuss the types of remedies available forbreach of contract for sale of land.
IntroductionWhen a contract for the sale of land is breached, the injured party may seek various remedies toprovide relief, enforce the contract terms, or compensate for losses incurred. The primaryobjective of these remedies is to restore the injured party to their pre-contractual position orprovide adequate compensation for the breach. This discussion will explore the types of remediesavailable for breach of contract for sale of land, examining each remedy in detail, supported byrelevant cases and sections.Remedies for Breach of Contract of sale of land1. Specific PerformanceSpecific performance is one of the equitable remedies. Under common law, specificperformance was not a remedy. The right of a litigant is limited to the collection ofdamages. However, the court of equity developed the remedy of specific performance asdamages often could not adequately compensate someone for the inability to own aparticular piece of real property, land being regarded as unique. The commonest case inwhich the court of equity specifically enforces a contract is in cases where the contract isfor sale of land or for the granting of a lease.In this regard, it is sometimes possible to find the land in issue having a peculiar value tothe purchaser or leasee. In a case of breach of contract for sale of land, the appropriateorder is that of specific performance and not the award of damages which cannot be anadequate remedy.Usually where the court is satisfied with the necessary conditions, it would invariablydecree specific performance of a contract affecting the land. This decree would be madewhere the parties are both within the jurisdiction and even out of the jurisdiction.Black’s Law dictionary defined specific performance as follows: "The rendering, as nearlyas practicable, of a promised performance through a judgment or decree; a court orderedremedy that requires precise fulfilment of a legal or contractual obligation when monetarydamages are inappropriate or inadequate, as when the sale of real estate or a rare article isinvolved".
It is an equitable relief, given by the court to enforce against a defendant, the duty of doing whathe agreed by contract to do. The remedy is in contrast with the remedy by way of damages forbreach of contract, which gives pecuniary compensation for failure to carry out the terms of thecontract. Damages and specific performance are both, remedies available upon breach ofobligations by a party to the contract; the former is a ‘substitutional ’remedy, and the latter a‘specific’ remedy. The plaintiff seeking this remedy must first satisfy the court that the normalremedy of damages is inadequate; the presumption being that in cases of contract for transfer ofimmovable property, damages will not be adequate. Even in these cases, specific performance isnot always granted, as it is a discretionary remedySpecific performance is usually pleaded in the statement of claim as follows:An Order of specific performance of the agreement made in 1982 between the 2nd Plaintiffand 1st and 2nd Defendants for the assignment of the unexpired residue of the leaseholdinterest in the property known as Plot 1164 SakaTinubu Street, Victoria Island Lagos coveredby Certificate of Occupancy issued on the 10th of February 1983 and registered as No.84 page84 in volume 1982 at the Lagos State of Nigeria Land Registry…25 Or in the following: Anorder of specific performance of the contract of sale between the plaintiff and the 1stDefendant.The gist of specific performance rests squarely on the agreement of the parties. In MinilodgeLtd. v Ngei where the Supreme Court held: A contract of sale exists where there is final andcomplete agreement of the parties on essential terms of the contract, namely, the parties to thecontract, the property to be sold, the consideration for sale and the nature of the interest to begranted. Once there is agreement on these essential terms, a contract of sale of land or propertyis made and concluded. In principle, establishing the basis of specific performance, Brett, J.S.C in Fakoya v St. Paul’sChurch, Shagamu, held as follows: The basis of the remedy of specific performance is notthe conversion of an equitable interest into a legal interest, but the enforcement of acontract where damages would not afford a complete remedy, and although specificperformance is more frequently granted where the contract is for the sale of land than inother cases, this is not because of any distinction between the jural nature of a right topurchase land and other contractual rights but because damages are less often a complete
remedy for the breach of a contract for the sale of land than for the breach of othercontracts. An action for specific performance arises once there exists a contract coupledwith circumstances which make it equitable to grant a decree of same.F.F. Tabai, JSC heldas follows: … This being a contract for the sale of land attracts a greater justification for a decreeof specific performance because as opposed to other types of contract, the land may have aspecial and peculiar value to the purchaser. The Plaintiffs/Respondents have therefore everyjustification to claim for specific performance.Moreso, a party who seeks an equitable remedy of specific performance, must show that he hasperformed all the conditions precedent to the grant, that is, that he has fully performed his side ofthe contract.Specific performance is an equitable remedy. When the court orders specific performance, theyare ordering one party to perform a contractual obligation. Specific performance is distinct fromdamages and from actions on debts as a remedy for breach of contract. Specific performance ismore often employed for contracts to convey property than for contracts to produce things or toprovide services. A partial explanation for the scarcity of cases on specific performance may bethat our courts generally frown on attempts to employ specific performance where contract lawwould not sanction the remedy. The familiar rule is that courts will not award specificperformance when damages provide adequate reliefIn another case of Beswick v Beswick [1968] AC 58Where Peter Beswick sold his coal business to his nephew, John Beswick. The contract includeda promise to pay Peter's wife, Emily, a weekly annuity. After Peter's death, John refused to paythe annuity. Emily sued John for breach of contract. The House of Lords held that specificperformance was an appropriate remedy, as damages would not have adequately compensatedEmily. Also, inOgunbiyi v Ishola [2006] 12 NWLR (Pt. 993) 394 here the parties entered into acontract for the sale of land. The buyer failed to complete the purchase, and the seller sued forspecific performance the Court of Appeal held that specific performance was an appropriateremedy, as the contract was for the sale of land.2. Damages
Damages refer to monetary compensation awarded to an innocent party in a civil suit, typicallyresulting from a breach of contract. The innocent party is generally entitled to damages, exceptwhere the contract expressly or implicitly provides otherwise.Purpose of DamagesThe primary objective of damages is to place the injured party in the same position they wouldhave been in if the contract had been performed. This principle was established in the case ofRobinson v Harman (1848) 1 Ex 850 As stated by Parke B in Robinson v Harman, "The ruleof the common law is that where a party sustains a loss by reason of a breach of contract, heis, so far as money can do it, to be placed in the same situation with respect to damages, as ifthe contract had been performed."Remoteness of DamagesWhile the aim of damages is to put the innocent party in the position they would have been in ifthe breach had not occurred, it is also important that the party that has breached the contract isonly liable for damage which was reasonably foreseeable. The general rule of remoteness ofdamages was formulated by Alderson B in Hadley v Baxendale (1854) 9 Ex 341. In the case,the plaintiffs were millers who contracted with the defendants to take a broken mill shaft as apattern for a new shaft. The defendants failed to deliver the shaft on time, causing the plaintiffsto lose business. The plaintiffs sued for loss of profits.Classification of DamagesDamages can be classified into various categories, including:1. General and Special DamagesThe tendency is that where the losses claimed for as a result of the breach of a contract arespecific items with a clear or known monetary value, it shall be referred to as special damages. IfA contracts with B to sell a car to him to be used as a cab, and the car turns out to be a broken-down piece of junk, B may sue A for both loss of earnings and whatever amount would berequired to fix the car as special damages. Where the court itself has to estimate or assess thedamages, the resultant figure is general damages.
2. Nominal DamagesWhere one party has committed a breach, but such a breach has not resulted in any loss or theinnocent party has failed to prove a loss resulting from the breach, the court has the discretionarypower to award nominal damages. In *Nigeria Advertising and Publicity Ltd v NigerianAirways (2003) 15 NWLR (Pt. 842) 200*, the defendant admitted the breach of the contract butthe plaintiff was unable to establish any loss suffered. The court, nevertheless, held that since nospecial damages had been proved, it awarded nominal damages in the sum of 100 pounds.3. Exemplary Damages*Exemplary damages are awarded more as punishment and less as compensation. Exemplarydamages are usually only awarded in the following situations:- In cases of provocative arbitrary and unconstitutional acts by government servants.- Where the defendant's conduct has been calculated by him to make a profit for himself whichmight well exceed the compensation payable to the plaintiff.- Where expressly authorised by statute.Remoteness of DamagesAfter it has been decided by the court that a party is obligated to pay damages, it must then bedecided by the court the extent of the damages. This is known in law as the remoteness ofdamages. The question of remoteness of damages was given detailed consideration in *Koufos vC. Czarnikow Ltd (The Heron II) [1969] 1 AC 350*. In the case, a chartered ship deviated, inbreach of contract, with the result that it reached its destination nine days later than wouldotherwise have been the case. The market value of the sugar it carried had fallen. The court heldthe defendant liable, with Lord Reid establishing that while it is not every loss which isreasonably foreseeable which the party in breach shall be liable for, the party in breach shall beliable for every loss which is sufficiently likely to occur as a result of the breach. Once thedamage is a reasonably likely result of the breach, it is immaterial how extensive the damage isand the party in breach shall be liable.Mitigation of Damages
It is often said that the plaintiff is under a duty to mitigate his losses, and he cannot recover for aloss which he ought to have avoided. Whatever loss which flows from the unreasonable actionsor inactions of the normally innocent party in a breach shall not be recoverable, and damagesshall not be awarded in respect of such. The principle on mitigation of losses was clearly statedin *Omongwu v NNPC (1993) 4 NWLR (Pt. 286) 162*, where the court held that the plaintiffmust take reasonable steps to mitigate the loss to him and cannot3. Rescission Rescission is a remedy where the contract is cancelled, and both parties are restored to their pre-contractual positions. This remedy is typically awarded where the breach is fundamental or goesto the root of the contract.It is a settled law that a contract cannot be rescinded by one party for the default of the other un-less both can be put in status quo as before the contract. See Hunt v. Silk (1804) 5 East, 449. InBlackburn v. Smith (1848) 2 Ex. 783, 792, there was a contract for the sale of a piece of land be-tween the plaintiff and the defendant. The plaintiff, having paid a deposit, went into possession.He later gave notice to rescind the contract on the ground of certain events which had occurredand brought an action to recover his deposit. Parke, B. delivering the judgment of the Court saidthat inasmuch as the plaintiff had or retained the possession of the property the parties could notbe placed in status quo and, therefore, the action for the recovery of the deposit could not bemaintained. Thus the fact of possession of the land by the plaintiff, made impossible for the actof rescission to have its natural effect.If rescission can be accomplished by the act of a party, the question as to whether the right to res-cind is in fact a judicial remedy becomes relevant. Surely the assistance of a court of equity isdispensed with where the act of rescission is not challenged by the other party to the contract.But a different situation may arise where for example there remain some question to be settled asbe- tween the parties such as taking account of property which might have passed between themwith a view to restoring the parties to status quo as before the contract, or where the other partyto the contract challenges the right of the first to rescind. In such cases, the assistance of a court of equity becomes indispensable; it would have to decidewhether the act of rescission relied upon was in itself effect. Nevertheless, 'it is an entire mistake
to suppose that it is this verdict which by itself terminates the contract and restores theantecedent status. The verdict is merely the judicial determination of the fact that the expressionby the plaintiff of his election to rescind was justified, was effective; and put an end to thecontract.’ See Abram Steamship Co. v. Westville Shipping Co. (supra) at 781. See further, ReeseRiver Silver Mining Co. v. Smith (1869) L.R. 4 H.L. 64. 73; Oakes v. Turquand (1867) L.R. 2H.L. 325.Grounds for Rescission1.Mistake:Where the two parties laboured under a common or mutual mistake, rescission may begranted. Lindley, L.J. said: in Huddersfield Banking Co. v. Henry Lister & Son (1895) 2Ch. 273 at 281, 'An agreement founded upon a common mistake, which mistake is im-pliedly treated as a consideration which must exist in order to bring the agreement intooperation, can be set aside, formally if necessary, or treated as set aside and as invalidwithout any process or proceedings to do so.'In Solle v. Butcher (1950) 1 K.B. 671 at 693 C.A, the Court of Appeal held that a contract isliable in equity to be set aside if the parties were under a common misapprehension either as tofacts or as to their relative and respective rights, provided tha the misapprehension wasfundamental and that the party seeking to set it aside was not himself at fault. See LordWestbury in Cooper v. Phibbs (1867) L.R 2 H.L. 149, 170. In Abraham v. Oluwa (1944) 17N.L.R. 123 at 126, the plaintiff at the time he purchased the property was labouring under themistaken idea that he had either a defective title or no title at all. Similarly, the defendantpossessed the mistaken idea that the property belonged to the judgement creditor. In an actionbrought by the plaintiff to recover the purchase money which he had paid to the defendant,Banker J. said: 'if parties enter into an agreement with reference to a supposed actual state ofthings does not in fact subsist, the consideration for the agreement fails and the agreement isconsequently void.2. Misrepresentation:A contract that is induced by a material misrepresentation made eitherfraudulently or innocently cannot stand; such misrepresentation is a ground for rescission.
(a) Fraudulent Misrepresentation:There is fraudulent misrepresentation when it is shown that a false representation has been madeknowingly and intentionally or without belief in its truth or recklessly without caring whether itis true or false and with the intention that the other party should act on it and has been so actedupon by the other party. At law and in equity such misrepresentation renders the contract inducedby it voidable. Derry v. Peek (1889) 14 App. Cas. 337.Peek v. Gurney (1873) L.R. 6 H.L. 377.Horsfall v. Thomas (1862) 1 H. & C. 90; Smith v.Chadwick (1884) 9 App. Cas. 187 at 196In Sule v. Aromire (1951) 20 N.L.R 20 at 21-22,the defendant put up for sale by auction apiece of land and the poster advertising the sale mentioned that the defendant had obtained acourt judgment in respect of the land. The defendant went further to give the plaintiff a copy ofthe judgment which showed that the plaintiff was the owner. But in truth, the judgment did notrelate to the piece of land. The plaintiff, having bought the land on the strength of themisrepresentation made to him by the defendant, made unsuccessful attempt to obtainpossession; he therefore brought this action claiming annulment of the conveyance and damages.The court agreed with the submission of the defendant that where there has been a. conveyanceno rescission is possible unless there has been fraud. However, the court rejected the submissionthat the defendant had hidden nothing and that the principle caveat emptor applies. The principleis that if the plaintiff had acted on the faith of a false representation made to him by thedefendant, it is no defence for the latter that the plaintiff might have found out the truth if he hadmade enquiry. (b) Innocent Misrepresentation:Though innocent misrepresentation cannot support an action at law for damages it is, in equity, aground for rescission. See Derry v. Peek (supra); Newbigging v. Adam (1886) 34 Ch.D. 582;Heilbit Symons & Co. v. Buckleton (1913) AC. 30 at 49. Where rescission of a contract isclaimed on the ground of innocent misrepresentation it is sufficient if the plaintiff can prove thatthere was misrepresentation which induced him to enter into the contract. However, honestly,such misre- presentation might have been made and however free from blame the person whomade it, the contract having been obtained by misrepresentation cannot stand. See Redgrave v.
Hurd (1881) 20 Ch.D. 1 at 12; Derry v. Peek (supra); Low v. Bouverie (1891) 3 Ch.D.82 at 100.The Court of Eq- uity has power to set aside contracts whenever the court is of the opinion that itwould be unconscientious for a party to avail himself of a legal advantage which he hadobtained. See Torrance v. Bolton (1872) L.R. 8 Ch. 118, 124; see generally, the recent changesmade in the law of England by the Misrepresentation Act, 1967.Misdescription:The right to rescind is an appropriate remedy where one of the parties to the contract hasmisdescribed property, the subject matter of the contract. However, misdescription that wouldsustain an action for rescission must be substantial. In Smith v. Land and House PropertyCorporation (1884) 28, Ch.D. 7 at 13, the plaintiffs put up an hotel for sale stating in theparticulars that it was let to 'F, a most desirable tenant, at a rental of £400 for an unexpired termof 27½years.' The defendants entered into the contract of sale in reliance upon these particulars.But the truth of the matter was that the tenant did not pay his rent properly. When this becameknown, the defendant refused to complete. In a counter claim by the defendant for rescission.Baggaly, L.J. said that it is material representation for the vendors to describe a tenant who didnot pay his rent properly as a very desirable tenant.In Sodipo v. Coker (1932) 11 N.L.R. 138, the plaintiff purchased certain land at an auctionsaleheld by the defendant who had described the land as about 50 acres whereas it measured22.2 acres in reality. The plaintiff brought an action to set aside the sale on the ground of thedefen- dant's misdescription of the extent of the land. Kingdom, C.J. took the view that themisdescrip- tion was in a material and substantial point and that it was calculated to deceive andit did dece- ive the purchaser. He therefore held that the plaintiff was entitled to have the sale setaside on the ground of misdescription.The right to rescind may also be lost where the party entitled to the right does any act that is in-consistent with avoiding the contract. In Taiwo v. Princewill (1961) 1 All N.L.R. 240, thedefen- dant had refused to complete a building under a building contract with the plaintiff on theground that the plaintiff, contrary to the building contract had failed to make certain payments tohim. It was, however, shown in evidence that the defendant later continued to work and receivedsome payments from the plaintiff. Affirming the decision of the trial court, the Federal Supreme
Court held that because the defendant had later continued with the work and accepted further in-stallments under the contract, he had lost the right to repudiate the contract for failure on theplaintiff's part to pay the agreed sum though he retained the right to recover the sum due by ac-tion. Consequence of RescissionThe condition for granting the relief is that the parties, as between them, be restored to their pre-contract position. Therefore, where the relief is granted, the contract is no longer in existence,thus the question of claiming damages for its breach does not arise since the full effect of rescis-sion is to treat the contract as if it had never been entered into. As was stated by Romer, J. inBarber v. Wolfe (1945) Ch. 187 at 189-190, where a party entitled to rescind elects that course ofaction, he cannot at the same time obtain damages for a breach of the contract which he is askingthe court to rescind..In Johnson v Agnew [1980] AC 3 Johnson contracted to sell land to Agnew. Agnew failed tocomplete the purchase, and Johnson sued for rescission. The House of Lords held that rescissionwas an appropriate remedy, as the breach was fundamental and the contract could not beperformed. Also in Odu'a Investment Co. Ltd. v Talabi [2006] 12 NWLR (Pt. 993) 256*Theparties entered into a contract for the sale of land. The buyer failed to complete the purchase, andthe seller sued for rescission. The Court of Appeal held that rescission was an appropriateremedy, as the breach was fundamental and the contract could not be performed.4. Restitution as a Remedy for Breach of Contract for Sale of LandRestitution is a remedy that requires the defaulting party to restore any benefits or gains obtainedas a result of the breach. In the context of a contract for the sale of land, restitution can serve as aremedy where the seller has obtained a benefit or gain as a result of the breach.Types of RestitutionThere are two types of restitution that can be applied in a contract for the sale of land:1. *Restitution in Integrum*: This type of restitution requires the defaulting party to restore theinjured party to their original position before the contract was entered into.
2. *Restitution for Unjust Enrichment*: This type of restitution requires the defaulting party todisgorge any benefits or gains obtained as a result of the breach.How Restitution WorksSuppose A contracts to sell a piece of land to B for $100,000. However, A breaches the contractand sells the land to C for $120,000. In this case, B may seek restitution against A for the benefitobtained by A as a result of the breach (i.e., the $20,000 profit obtained from selling the land toC).Spencer v. Spencer (1978) 2 NSWLR 476: In this case, the court held that the defendant wasrequired to account for the profits obtained from the sale of the property, which was sold inbreach of the contract.Baltic Shipping Co v Dillon (1993) 176 CLR 344: I n this case, the court held that thedefendant was required to pay restitution for the benefits obtained from the breach of contract,including the profits obtained from the sale of the ship.3Luxor (Eastbourne) Ltd v Cooper [1941] AC 108: I this case, the court held that thedefendant was required to account for the profits obtained from the sale of the property, whichwas sold in breach of the contract.ConclusionIn conclusion, the remedies for breach of contract for sale of land are varied and designed toprovide relief to the injured party. Specific performance, damages, rescission, and restitution areall available remedies, each with its own unique characteristics and applications. Ultimately, thechoice of remedy will depend on the specific facts of the case and the goals of the injured party.
References:1. Beswick v Beswick [1968] AC 582. Koufos v C. Czarnikow Ltd (The Heron II) [1969] 1 AC 3503. Smith v. Land and House Property Corporation (1884) 28 Ch.D. 74. Sodipo v. Coker (1932) 11 N.L.R. 1385. Taiwo v. Princewill (1961) 1 All N.L.R. 2406. Erhumwunse v. Omoregbe (1961) W.N.L.R. 3017. Johnson v Agnew [1980] AC 3678. Odu'a Investment Co. Ltd. v Talabi [2006] 12 NWLR (Pt. 993) 2569. Spencer v. Spencer (1978) 2 NSWLR 47610. Baltic Shipping Co v Dillon (1993) 176 CLR 34411. Luxor (Eastbourne) Ltd v Cooper [1941] AC 10812. Nigeria Advertising and Publicity Ltd v Nigerian Airways (2003) 15 NWLR (Pt. 842) 20013. Fakoya v St. Paul's Church, Shagamu (unreported)14. Minilodge Ltd. v Ngei (unreported)15. Abram Steamship Co. v. Westville Shipping Co. (unreported)16. Huddersfield Banking Co. v. Henry Lister & Son (1895) 2 Ch. 27317. Redgrave v. Hurd (1881) 20 Ch.D. 118. Newbigging v. Adam (1886) 34 Ch.D. 58219. Heilbit Symons & Co. v. Buckleton (1913) AC. 3020. Cooper v. Phibbs (1867) L.R 2 H.L. 149
21. Torrance v. Bolton (1872) L.R. 8 Ch. 11822. Wingrove v. Wingrove (1885) 11 P.O. 8123. Johnson & Or. v. Maja & Or. (1951) 13 (link unavailable) 29024. Barber v. Wolfe (1945) Ch. 18725. Henry v. Schroder (1879) 12 Ch. 66626. Hall v. Burnell (1911) 2 Ch. 551Books:1. Black's Law Dictionary2. Misrepresentation Act, 1967Academic Sources1. _McKendrick, E. (2014). Contract Law: Text, Cases and Materials. Oxford University Press._2. _Poole, J. (2016). Textbook on Contract Law. Oxford University Press._3. _Stone, R. (2017). The Modern Law of Contract. Routledge._Websites1.https://cjokoyelawview.com/law-423-equity-and-trust-i/topic-15-rescission#:~:text=The%20right%20to%20rescind%20is%20an%20appropriate%20remedy%20where%20one,for%20rescission%20must%20be%20substantial.2. https://journals.unizik.edu.ng3. https://www.learnnigerianlaw.com/learn/contract-law/remedies