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RES exam question on Contract & Agency Law: Ms Tay now do

HardLaw of Contract & Agency · Paper 1

Ms Tay obtains a court order for specific performance against Mr Ho, who had refused to complete the sale of his flat to her. Three months later he still has not completed, and property prices in the area have fallen 4% since the order. What may Ms Tay now do?

  1. ANothing further, as by choosing specific performance she gave up any claim to damages.
  2. BEnforce the order and also recover damages for the full loss of her bargain.
  3. CAsk the court to discharge the order, end the contract and award her damages instead.
  4. DRescind the contract from the start and recover her deposit, without any damages.
Show answer & explanation

Answer

C. Ask the court to discharge the order, end the contract and award her damages instead.

Explanation

Answer: She may ask the court to discharge the order, end the contract and award her damages instead, since Mr Ho has ignored it for three months.Watch out: The price fall goes only to how much the damages come to.Rule: A buyer who obtains specific performance keeps her right to damages. If the order is not obeyed, she may ask the court to discharge it, end the contract and award damages for the breach.Source: Johnson v Agnew [1980] AC 367; Lee Chee Wei v Tan Hor Peow Victor [2007] SGCA 22 (Court of Appeal: the landmark decision on this election); /learn/remedies-for-breach-of-property-contract

Why the other options are wrong

  • Specific performance gave up damages: Obtaining specific performance does not give up damages for good; she can return to court if the order is not obeyed.
  • Enforce order plus full loss-of-bargain damages: She cannot have both the property and damages for the whole loss of her bargain, though delay damages can sit alongside performance.
  • Rescind from the start, deposit only: Termination for breach is not rescission from the start; it keeps the damages claim alive.

Study the concept behind this question: Remedies for Breach of a Property Contract

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