Commercial Remedies

Compensation in Contract and Tort Cases

Contract Law

Remedies for Breach Cases

Johnson v Agnew [1980] AC 367

Key Points

• Termination is prospective - it wipes away future obligations under the contract but does not render the contract void ab initio 
• Obtaining an order for specific performance does not forfeit the right to terminate and sue for breach
• Damages in contract law aim to put the innocent party, so far as money can do so, in the same position as if the contract had been performed
• The date of assessment is not necessarily fixed at the date of breach; the court can vary it when another date better reflects the claimant’s losses

Facts

• The Johnsons (C) contracted to sell their farm to Mrs Agnew (D), but she refused to complete
• C obtained an order for specific performance against D but it was never carried out
• The mortgagees sold the farm but realised an insufficient amount to discharge C’s debt
• C sued D for breach of contract
• D argued that C had lost its right to sue for breach when it elected to seek specific performance