2000722040 20/U/22040/PSA

L1209

LAW OF CONTRACT II

REGISTRATION NUMBER: 20/U/22040/PSA

STUDENT NUMBER: 2000722040

NOT A RETAKE

17TH JANUARY 2022

NOT A RETAKE

NUMBERS ATTEMPTED. 5,2,1,4

NUMBER 5

Brief Facts.

In March 2020 a couple, Bonnie and Maria decided to build a house in Entebbe and they contracted their
nephew a construction engineer agreeing to pay him 70,000,000 for the work to be completed by 20th
February 2021. After taking ill, Dan with a premonition that he might not beat the deadline. With the idea of
hiring a subcontractor Dan asked the couple for extra 20,000,000. But by the beginning of September Dan
recovered and kept it to himself, finding out, the couple declined to pay the extra 20,000,000 because Dan,
after recovery had enough time to complete the job himself at the original price. Unfortunately the on the
night of 30th October 2020 the half-built structure caught fire and was destroyed. Police found fault in the
equipment Dan was using to construct and they also discovered beer and whiskey bottles not far away from
the site, they looked to have been opened, the night of the fire.

Issues

1)Whether the contract between Dan and the couple was frustrated due to Dan’s.

2Whether Dan can plead frustration due to the fact that the subject matter of the contract was destroyed in
the fire.

Law applicable 1)Contracts Act 2)Case Law

Issues resolved.

Issue I

Discharge of a contract generally means that the obligations of the parties have come to an end. The
contract may be discharged in four ways; by performance, by agreement, by breach and under the doctrine
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of frustration. The general principle is that parties must strictly comply with terms of the contract.
However, a party may be prevented from completing his or her side of the bargain due to unforeseeable
circumstances or events that are beyond his or her control as per section 66(1) of the Contracts Act. In
situations where the above happens the law allows the promisor to plead frustration, meaning that though the
parties entered into the contract, it has subsequently become impossible to perform. The burden of proving
frustration is on the party that seeks to use it to his or her advantage as illustrated in the case of Monday
Eliab v Attorney General [2006] 1ULR 556.

Frustration is a common law doctrine which operates to bring an agreement to an end on the happening of
some unforeseen supervening event which is beyond the control of the parties to the agreement.

The duration of illness is pivotal as to the fact, with discharge due to frustration in this regard. When Dan
takes ill in late July and later heals at the beginning of September, he still has enough time to beat the
deadline set for 20th February though the time for completion is lessened it makes it difficult to meet the
deadline but does not make it impossible. Therefore it is difficult but not impossible according to Davis
Contractors Ltd v Fareham Urban District Council [1956] AC 696, where the appeal was dismissed and
part of the holding inter alia was that the contract could not be frustrated by that fact that the work was not
completed within 8 months as agreed but within 22 months due to the shortage of skilled labour. It was held
that this did not frustrate the contract as the shortage of labour made it difficult but not impossible to
complete the work. According to Section 66 1) of the Contracts Act 2010, impossibility of performance
amounts to discharge by frustration but in the case of Dan his illness and recovery with enough time to
perform the contract does not ascertain impossibility. Therefore as a remedy Dan ought to have continued
with and finished the construction.

Issue II

Due to self induced frustration Dan, shall fail in his plea of frustration of the contract due to unavailability of
the subject matter of the contract due to its destruction by a fire. In Maritime National Fish Ltd v Ocean
Trawlers Ltd [1935] AC 524 a charterparty between the parties was renewed and a vessel was availed by
the respondents, but fishing in Canadian waters with a vessel that had an otter trawl was forbidden without a
licence. Maritime national fish ltd applied for licences for their five vessels and the Minister only granted
them three with the freedom to choose three within their fleet, and they chose three vessels but the
respondent’s was not chosen. They later pled frustration and that they were no longer bound by the charter
party. It was held that Maritime National Fish Ltd had self induced this frustration by not choosing the
respondents vessel and yet they could.

In the same way as in the case of Dan the police unveiled that the fire was caused by electrical faults in
some of the tools which Dan was using and that they were still connected to the electrical grid with the
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presence of intoxicants (alcohol) such as whisky which is highly flammable in the vicinity. This amounts to
negligible conduct further negating the plea of frustration because it was self induced.

In the Eugenia, Ocean Tramp Tankers Corporation v V/O Sovfracht [1964] 2 QB 226 where one of the
issues inter alia was that whether the blocking of the Suez Canal amounted to a circumstance capable of
frustrating the charterparty, and it was held that blocking of the Suez canal did not bring so fundamentally
different a situation as to frustrate a contract, which enunciates the issue in Dan’s predicament(self induced
frustration)

The remedy here is that Dan despite destruction of the building by a fire is still obligated to complete the
work as seen in Davis Contractors Ltd v Fareham UDC, [1956] AC 696 where even with a shortage of
labour the work should have been completed.
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NUMBER 2

a) BRIEF FACTS

Dominic supplied various items of stationery to Makerere University, for an agreed sum of Ushs.
80,000,000/=. Shortly after he fell sick and was bed ridden for two months; his shop remained closed for all
that time. Upon recovery, he found his business in serious financial difficulties. He sought to recover his
payment from the Vice Chancellor. He was told that the University would only pay him Ushs. 50,000,000/=
in full and he could either “take it or leave it.” As the Vice Chancellor put it. Considering his financial
difficulties, Dominic accepted the fifty million and signed on the voucher on which the balance was
indicated, “NIL.” However, he now seeks to recover his thirty million balance.

Issues

1)Whether the agreement of accepting 50 million instead of 80 million was entered into under undue
influence or economic duress?

2)Whether Dominic can recover his balance of 30 million even though he had signed and accepted the 50
million?

3)What remedies are available to Dominic?

Law Applicable

1)Contracts Act 2010

2)Case Law

Resolution of Issues

Issue I

Free consent of parties (Consensus ad idem) is an essential element for validation of a contract. Consent
must be obtained willingly without any form of duress or coercion .

Under Section 2 of the Contracts Act coercion is, “the commission or threatening to commit any act
forbidden under any law or the unlawful detaining or threatening to detain any property, to the prejudice of
any person with the intention of causing any person to enter into an agreement”. Duress is a common law
principle which entails threats or violence itself. At Common Law, the threat had to be illegal, morphing
into a crime or tort.
In Atlee v Backhouse (1883) 3 M & W 633 and Skeate v Beale (1840) 11 Ad & El 983, it was held that
threats must be made to a person and not their property. Due to this law economic duress was birthed.
Courts interfere when there is undue pressure.
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In D & C Builders Ltd v Rees [1966] 2 QB 617, Lord Denning refused to invoke estoppel on grounds that
the defendant, who knew that the builders were in urgent need of money, exerted improper pressure to
compel them to accept a sum that was substantially less than the one they were owed. The facts of the above
case are quite similar with those in the brief facts. The plaintiff’s business was facing financial difficulties.
The plaintiff refused to pay the defendants their money in full and told them that they could only receive 300
Pounds and they could either take it or leave it. The court held that the defendant had no right to do that.

In Liberty Construction Co. Ltd v Lamba Enterprises Ltd (HCT-00-CC-CS-215-2008), Justice Geoffrey
Kiryabwire cited explicitly the definition of duress given in the case of Pao On v Lau Yiu Long [1980] AC
614; in which duress was defined as coercion of the will so as to vitiate consent. It is the use of force or
threats of force to compel a person to agree to enter into a contract. Like in the above facts, Dominic was
facing financial difficulties just like the plaintiffs in the D & C Builders Ltd case, the Vice Chancellor told
him that he could only receive 50 million; “take it or leave it,” the Vice Chancellor therefore used this
gesture to coerce Dominic into a rushed agreement in order to save his business. The Vice Chancellor had
no right to do that, the Vice Chancellor cannot plead estoppel since he coerced Dominic into taking a lesser
amount. What was Dominic to do? His business was struggling, he was desperate and the Vice Chancellor
used that opportunity to gain an unfair advantage. Therefore, as was held in the Liberty Construction case
above, economic duress makes the contract in question at minimum voidable.

Issue II

Having resolved that the agreement was entered into as a result of economic duress, the Vice Chancellor
ought to give Dominic the remaining balance of 30 million. Dominic can recover the balance. Issue 1
disposes off issue 2.

Issue III

Dominic should be given all his remaining money without any conditions above. He can even claim
damages for the time spent pursuing his remaining balance.

2b)

Brief Facts

Prof. Mobert Bao, who teaches the law of contract at Bush University, recently published a book entitled An
Idiot’s Guide to the Law of Contract. He then told his students that if they didn’t buy his book, they
shouldn’t blame him if things don’t work out in the forthcoming exams. He gave each student a copy and
told them to pay later. The students have since sat and passed the exam with flying colours. However, they
feel they should not pay for the book, which they consider useless and overpriced.

Issues
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1)Whether if the books were taken under undue influence, the students should pay or not pay for them?
2)Whether the statements made by the Professor before giving each of them a copy of his book amounted to
undue influence?
3)What remedies are therefore available to the parties?

Law Applicable
1)Contracts Act 2010
2)Case Law

Resolution Of Issues

Issue I

Section 14(1) of the Contracts Act requires that the party should have used his or her dominant position to
obtain an unfair advantage over the other party. This means that the statements made by the professor must
be shown to have had a manifest disadvantage on the students. According to the brief facts above, the
students accepted the copies of the book and they in turn passed with flying colours.

In Bank of Credit and Commerce International SA v Aboody [1990]1QB 923, it was held that the plaintiff
must establish that he or she had suffered a manifest disadvantage.

In the case of National Westminister Bank v Morgan [1985] AC 686, the House of Lords held that the
transaction had not been unfair to the defendant since the bank had allowed her and the late husband to stay
in the house on favourable terms. Thus the transaction was to their advantage and the bank had to ensure that
the wife received independent advice. Basing on the above facts, the books were to be to the advantage of
the students since according to the above facts, the students pass with flying colours, which can be attributed
to the professor’s book, even though it’s not expressly stated. It cannot therefore be said that the influence of
the professor on the students to buy the book was disadvantageous if they passed with flying colours.
Having found that there is no manifest disadvantage to the students, they should therefore pay for the books.

Issue II
According to the brief facts above, the professor told his students that if they didn’t buy his book, they
shouldn’t blame him if the things don’t work out in the forthcoming exams. He then proceeded to give each
student a copy that they’d pay for later on. I

n the case of Allcard v Skinner (1887) 36 Ch. D 145, it was held that undue influence exists where a
contract has been entered into as a result of pressure, which falls short of amounting to duress.
Section 14(2) (a) of the Contracts Act provides that a contract is induced by undue influence where the
relationship subsisting between the parties to a contract is such that one of the parties is in a position to
dominate the will of the other party and uses that position to obtain an unfair advantage over the other party.
Basing on the brief facts above, Prof. Mobert Bao, as the lecturer is clearly in a dominant position over the
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students, he is in a position to determine the academic fate of the students; he can choose to fail them if they
refuse to buy his book; as can be implied from the statement he makes. The students, out of the fear of
being failed have no option to but to accept the book.

According to Section 14(2) (b) of the Act, a party is in a dominant position where he or she holds a real or
apparent authority over the other party. Basing on the brief facts above, the Professor is clearly in a
dominant position as he determines the academic fate of the students, they have no option but to comply
with his demands.

In Hassanali Issa & Co. v Jeraj Produce Store [1967] EA 555, the court held that undue influence only
arises in a contract where one of the parties is in a position to dominate the will of the other party and uses
that position to obtain an unfair advantage. In the case of Dunbar Bank plc v Nadeem [1998] 3 All ER 876,
it was held that the victim must show that in addition of proving that there was influence, it must have been
undue.

Having determined that from the above facts the professor is in a position to determine the academic fate of
the students, he is in a position of authority; there is in fact presumed undue influence given the relationship
between the professor and the students.

Issue III
The students should pay for the books since they helped them to pass the exams. There was undue influence
but it was not disadvantageous. The professor should receive money for his books and the students should
pay since they gained from the books.
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NUMBER 1a)

Brief Facts.

Opio offered to sell 100 acres of farm land in Kitgum, to Chigamoi. Opio said “Although I have never
reared cattle on the land, I am quite sure it is capable of handling a herd of two hundred heads of cattle with
ease.” Convinced by the claimed capacity of the land, Chigamoi bought it at shillings 100,000,000 paying
shillings 50,000,000 cash, the balance to be paid within one year. Chigamoi started using the land, but soon
discovered that actually at most the land could hold fifty heads of cattle. Chigamoi paid the balance when it
was due, but three years later, he feels cheated, and he has decided to file a suit against Opio, seeking a
refund of his money and general damages.

Law Applicable.

1)The Contracts Act 2010 2)Case law

Issues

1)Whether Opio can be rewarded damages.

2)Whether, Opio’s statement amounted to a misrepresentation.

Issues resolved

Issue I

Award of damages according to Section 13d) Of The Contracts Act provides that,

“A party to a contract, whose consent is obtained by fraud or misrepresentation, may, where that party thinks
fit, insist that the contract is performed and that he or she is put in the position in which he or she would
have been if the representations made, had been true.”

Where a plaintiff can prove clearly that there was misrepresentation the remedies are voidable that is to say,
rescission, the contract is still valid until the representee decides to rescind it or set aside.

In Ngege (U) Ltd v. SDV Transami (U) Ltd 2003, court enunciated that in civil suits, the onus of proof lies
with he who alleges. Given the circumstances above, it is impossible for Chigamoi, to prove that the
statements of Opio, amounted to misrepresentation. A statement of opinion, cannot amount to
misrepresentation, thereby I advise Opio, to be ware of the principle of caveat emptor.

Issue II

Whether Opio’s statement amount’s to misrepresentation.

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Section 2 of the Contracts Act defines misrepresentation as “A positive assertion made in a manner which
is not warranted by the information of the person who makes it or an assertion which is not true, though the
person who makes it believes it to be true; b) any breach of duty which without an intent to deceive, gains an
advantage to the person who commits it or anyone who claims under that person by misleading another
person to his or her prejudice or to the prejudice of any one claiming under that other person; or c) causing,
however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is
subject of the agreement.”

Simply put, misrepresentation is a false statement of fact that induces the party to whom it is made to enter
into a contract.

In Fred Nuwagaba v Ade Musana Kaguma (Civil Appeal 42 of 2012) , the court held that a
misrepresentation is a statement of fact that is made by a party to contract and is untrue and has the object of
inducing the representee to enter into a contract.

Based on the brief facts Opio’s statement to Chigamoi is one of opinion and not of fact. It is evidently clear
that Opio, gave his honest opinion.

In Dimmock v Hallet (1866) 2 Ch App 21, an estate was to be auctioned off. The estate had three parcels of
land. The advertisement for the auction described one of the parcels as having "fertile and improvable land",
Mr Dimmock, was a successful bidder, however in fact the land wasn’t fertile but dry. The plaintiff sought
rescission of the contract for misrepresentation. Court held the description of land as ‘fertile and improvable’
did not constitute a misrepresentation. The statements of Opio were also inncocent and had no intention of
being fraudulent. According to the Hedley Byrne case, all misrepresentations that were not fraudulent were
held to be innocent.

In Bisset v Wilknson [1927] AC 177, where the vendor of a farm, when asked how many sheep he thought
the farm could take, declared that in his judgment it would support 2000 sheep. The farm however had never
held any sheep. It was thereby held that the statement was a mere honest statement of opinion and not a
statement of fact. Thus, the action for misrepresentation was declined.

Even when the statement, induced the other party, into participating in the contract, like established in the
case of In Non-Performing Assets Recovery Trust v S. R. Nkabula and Sons Limited [2007] 2 ULR
548. It has been established that the honest statement of opinion by Opio, even when it induced Chigamoi
into the contract, doesn’t amount to a misrepresentation.

1b)

Contracts stained with misrepresentation, are voidable and not viod. Either damages are awarded or
indemnity, under restitution or rescission.
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DAMAGES.

In Hall Brothers SS Co. Ltd v. Young[1939] 1 KB748 at 756 (CA), Lord Green MR, said , ‘Damages to an
English lawyer imports this idea, that the sums payable by way of damages are sums which fall to be paid by
reason of done some breach of duty or obligation, whether that duty or obligation is imposed by contract, by
the general law, or legislation.’ Damages are awarded for only fraudulent and negligent misrepresentation
simply because the law presumes damage in respect of any unlawful act as provided for in the case of
Ashby v. White 92 ER126. There are strictly no damages for innocent misrepresentation. Under fraudulent
misrepresentation, the plaintiff may acquire damages under the tort of deceit.

In Doyle v Olby (Ironmongers) Ltd [1962] 2 QB 158 lord denning held that,

“Damages can be recovered: and it does not lie in the mouth of the fraudulent person to say that they could
not reasonably have been foreseen. For instance, in this very case Mr. Doyle has not only lost the money
which he paid for the business, which he would never have done if there had been no fraud: he put all that
money in and lost it; but also he has been put to expense and loss in trying to run a business which has
turned out to be a disaster for him. He is entitled to damages for all his loss, subject, of course to giving
credit for any benefit that he has received. There is nothing to be taken off in mitigation: for there is nothing
more that he could have done to reduce his loss. He did all that he could reasonably be expected to do.’

A party affected by fraudulent misrepresentation must recover all the direct loss incurred.

Plaintiffs can also claim damages, under negligent misrepresentation, under the tort of negligence, with the
over view purpose to reinstate the plaintiff to the position he or she occupied before the misrepresentation
had been made.

INDEMNITY

According to Section 68 of the Contracts Act 2010, “indemnity” means an undertaking by which a person
agrees to reimburse another upon the occurrence of an anticipated loss;

Indemnity is monetory payment by the misrepresented party in respect of expenses necessarily created in
complying with the terms of the contract and is different from damages.

In Whittington v Seale-Hyne (1900) 82 LT 49, the plaintiff claimed damages for the loses he incurred from
establishing a poultry farm which he thought was not infected with any diseases, however his chicken got
infect and died, court awarded him indemnity by not damages.
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NUMBER 4a)

Discharge of a contract generally means that the obligations of the parties have come to an end. A contract
maybe be discharged through discharge by performance, by agreement, by breach, and under the
doctrine of frustration. In the doctrine of frustration, the principle is that frustration discharges both
parties of their obligations. According to the section 66 1 of the Contracts Act 2010 states the doctrine of
frustration which is to ten fact that where a contract becomes impossible to perform or is frustrated and
where a party cannot show that the party assumed the risk of impossibility, the parties to the contract shall
be discharged from further performance of the contract. Enunciated in Eliab Monday V Attorney General
SCCA No. 16 of 2010 that destruction of a subject matter of a contract without the fault of either party
renders the contract frustrated hence the parties discharged from performance as in Taylor anor V Cadwell
& anor [1861-1873]AELR 1876 26 .In Taylor V Cadwell (supra) lord Blackburn j stated “ there seems no
doubt where there is a positive contract to do a thing not in itself unlawful , the contractor must perform it or
pay damages for not performing it , though in consequence of unforeseen accident the performance of his
contract has become unexpectedly burdensome.

In Howard and company (Africa ltd) (supra) lord Daniel Crawshaw justice of appeal stated that onus of
proving frustration is on the party alleging it, if that is proved, the onus is upon the other party to prove that
frustration was self-induced. Section 101(1) of the Evidence Act lays the burden of proof as he who alleges
must prove. Below are the various circumstances through which a contract maybe frustrated in light of the
above case;

Destruction of the subject matter of the contract also renders a contract frustrated. One of the
circumstances in which the doctrine of frustration applies is where the subject matter of the contract has
been destroyed. In the case of Taylor v Caldwell[1861-1873]AELR 1876 26 the defendant agreed to
lease out a music hall to the plaintiff. After the contract was completed, prior to the day of the concert, a fire
broke out, totally destroying the music hall. The plaintiffs had made widespread arrangements with regard to
the productions they intended to perform. The loss of the music hall meant that their concerts had to be
cancelled, resulting in substantial financial loss to the plaintiffs. The contract contained no express
provisions dealing with this eventuality. The plaintiffs sued for non-performance of the contract in order to
recover their losses. The defendants pleaded the destruction of the music hall through no fault of their own
as a defence. The court held that the contract was frustrated. This goes to show that in event that there is no
longer subject matter of the contract due to an eventuality that is beyond both parties the contract is treated
as frustrated.

Unavailability of the subject matter of the contract also render the contract impossible to perform
therefore maybe be treated as frustrated. Where the subject matter, though not destroyed, stops to be
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available for the purposes of the contract for which it has been procured , the doctrine of frustration can
apply. The courts interpret the contract in terms of its nature and circumstances before defining the question
of frustration. In Condor v The Barron Knights Ltd[1966] 1 WLR 87. A member of a pop group agreed
to work each night of the week, should the work be available. He fell ill and was advised by his doctor to
work only four nights a week. He disregarded this advice since he considered himself adequately well to
perform the contract, and he did so. He was dismissed and was replaced by another musician. He brought a
claim for wrongful dismissal. The court held that his action would fail because his medical condition made it
impossible for him to perform his contractual obligations and that the contract was frustrated.

The government intervention or interrupting illegality may also render a contract frustrated . Once a
contract has been entered into, a party may be prevented from performing his or her obligations by
government rules, regulations or any other such enactments. It should be distinguished that in the case
Metropolitan Water Board v Dick Ken & Co Ltd[1918] AC 119 , the respondents entered an agreement
with the appellants to construct a reservoir to be finish within six months. However by a notice, issued under
the Defence of the Realm Act, the respondents were required to lease work on their contract and they
stopped the work accordingly. They claimed that the effect of the notice was to put an end to the contract.
The House of Lords held that the interruption created by the prohibition was of such a character and duration
as to make the contract when resumed a different contract from the contract when broken off and that the
contract was completely discharged.

Non-occurrence of an event central to the contract may also bring about frustration. Another circumstance
of frustration is the non-occurrence of an event, which is regarded as the basis of the contract. As seen in
Krell v Henry[1903] 2 KB 740. where the plaintiff let a flat to the defendant for 26th and 27th June 1902 to
use it in order to watch and celebrate the coronation parade of King Edward VII which would pass by the
flat. This purpose was not mentioned in the contract. The defendant made a pre-payment of one-third of the
rent. Due to the sudden illness of the King, the coronation procession was cancelled. The defendant refused
to pay the balance of the rent owing. The court held that the plaintiff could not recover the balance since the
contract had been frustrated by the cancellation of the procession. The court observed that the procession
and the position of the flat formed the objective of the contract which was thus frustrated.

4b)

Professor Ben Kiromba Twinomugisha in his book, Principles of law of contract in Uganda attributes the
source of equitable remedies to the historical rigidity of the remedy of damages in common law. Previously,
breach of contract in common law only attracted the remedy of damages. Over time, this remedy was found
to ne insufficient in resolving certain instances. This therefore necessitated the invention of the remedies of
specific performance and injunction.
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In this essay, I will discuss the remedies of specific performance and injunction.

Specific performance.

This equitable remedy compels a defendant to carry out his or her obligations in accordance with terms set
out in the contract. This remedy is discretionary and is governed by a number of rules. Firstly, the remedy is
only used when the affected cannot be compensated through damages. It therefore comes in to remedy the
inefficiency of damages. In Kibona Enterpises V. Departed Asians Custodian Board HCCS No. 663 of
1996 where court held that the remedy of specific performance would only come in to remedy the
inefficiency of damages. , court held that

According to Section 63 (1) of the Contracts Act 2010, in respect of breach of contracts for sale of sale of
goods which are identified and agreed upon at the time a contract is made or for unique goods, specific
performance will be awarded.

Secondly, the court will not grant this remedy where its effect would be to cause hardship amounting to
injustice to either party or an interested third party. In Patel V. Ali (1984)Ch 283, where the vendor and her
husband were the co-owners of a house which they had entered into a contract to sell. Bakruptcy disrupted
the completion of the house and the vendors medical ailments, among other events. These events also
corresponded with the birth of their second and third children. The buyer applied for, and was awarded, an
order of specific performance, but the vendor appealed on the grounds of hardship. The vendor spoke little
English and had to rely on friends and relatives for help. The effect of the decree would thus be to expose
her to undue hardship. The court held that in an appropriate case relief could be given against specific
performance where hardship arose once the contract had been entered into, even if the hardship itself was
not related specifically to the subject matter and not caused by the plaintiff. The court decided that damages
should be awarded instead of specific performance.

Thirdly, the remedy will only be granted if it is applied for within a reasonable time after the affected person
suffered loss. In the case of Mzee bin Ali v. Allibhoy Nurbhoy 1 KLR 58, court held that the remedy of
specific performance is only available to those that bring their grievances within a reasonable time before
the courts.

Injunction

Injunctions can be either prohibitory or mandatory in nature. It is also only available at the discretion of the
court and may not be granted where damages are an adequate remedy. Prohibitory injunctions restrain a
breach of a negative undertaking. A prohibitory injunction is an order to the defendant not to do something.
In the law of contract, a prohibitory injunction is used to restrain a breach of a negative undertaking. In
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co. Ltd prohibitory injunctions and held that where
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the appellant argued that clause was a restraint of trade clause and had to be reasonable to be upheld. The
respondents on the other hand argued that the restraint was only such as was necessary to protect themselves
from unfair trade practices. Court upheld the clause thus upholding the prohibitory injunction.

A mandatory injunction on the other directs the defendant to do a positive act, for example the demolition of
a building. Like specific performance, an injunction. The remedy cannot be granted if its effect is to cause
hardship to the defendant. The plaintiff must also go to court with ‘clean hands’, that is, his or her claim
must not be tainted with such factors as illegality or fraud or duress. In Giella v Cassman Brown & Co. Ltd,
where the plaintiff argued that the contract had imposed on in a unreasonable restraint in respect of his trade,
court explained that a prima facie case in an application for an injunction includes, but is not limited to a
‘genuine and arguable’ case. That it is a case which on the material facts presented, the court would deem
that there was an infringement on the rights of the affected.