Reference no: EM133945773

Assignment:

Question 1

Saul is the owner of Saul's Designs, an interior design firm. In 2019, Saul enters into a contract with Fishcake Restaurants ("Fishcake") to renovate one of Fishcake's new restaurant outlets. Saul's contract with Fishcake states that he is required to pay damages of $1,000 per day if the renovation works are not completed by 1 September 2019. The sum of $1,000 is based on the parties' estimate of the loss of profits and the expenses Fishcake is likely to suffer should there be a delay in the opening of Fishcake's new restaurant. As part of the project, Saul places an order with Carl's Curtains ("CC") for a set of curtains which are to be delivered by 1 August 2019. Although the curtains are available from other suppliers, Saul chooses to order them from CC as they are the most reasonably priced. A week before the curtains are due to be delivered, Saul is informed by CC that they are not able to supply the curtains as they are keeping their last set of the curtains for another customer. Saul is extremely upset with CC as the non-delivery of the curtains is likely to result in a delay to the completion of the renovation works for Fishcake.

1. Define 'liquidated damages clause'.
2. Define 'penalty clause'.
3. Explain whether Fishcake can claim the sum of $1,000 per day based on the clause in its contract with Saul, should Saul fail to complete the renovation works by 1 September 2019.
4. Explain whether Saul can successfully obtain specific performance against CC under the contract for the sale of the curtains.

Question 2

Steve signs a contract with Bob to sell his house for $3 million. Shortly after signing the contract, Steve informs Bob that he no longer intends to proceed with the sale as he has found another buyer who is prepared to pay him substantially more.

At around the same time, Steve signs an employment contract with Greater Asia Bank to work as its Chief Financial Officer starting from November 2019. A few days before Steve is due to start work, he changes his mind and informs the bank that he will not be taking up the position as he has an offer from another bank with a higher salary.

1. Explain the difference between specific performance and prohibitory injunction.
2. Can Bob obtain specific performance of his contract with Steve? Give reasons for your answer.
3. Can Greater Asia Bank obtain specific performance of its contract with Steve? Give reasons for your answer. Apart from specific performance, would Greater Asia Bank have any other legal remedies against Steve?