The key equitable remedies as applied in Kenya

  

Date Posted: 2/16/2013 1:59:52 AM

Posted By: KOROHS  Membership Level: Silver  Total Points: 840

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Equitable remedies are judicial remedies developed and granted by the courts of equity as opposed to courts of common law. They are granted by courts of chancery in England and remain available today in most common law jurisdictions including Kenya. In the jurisdiction both the equitable and legal remedies have been merged and a single court can issue both remedies.

RESCISSION
Rescission is a remedy employed to set aside a contract and to restore the parties to their pre-contractual positions. The contract is therefore voidable and remains until rescinded perfectly valid. Accordingly, rescission reflects the desire of one party no longer to be bound by the contract. As this will occur when there has been delay, the contract as been affirmed in full knowledge of the facts or it’s no longer possible to restore the status quo. Equity claims the ability to set aside a contract where the transaction is tainted by what is known as vitiating factor. The grounds of rescission include:

Misrepresentation, which can be fraudulent, negligent or innocent and in all the first two the victim can also obtain damages. It can also be a mistake of law. The mistake must have induced the contract.Undue influence where one party exerts undue influence over the other party which takes away the free will of the individual contracting and the transaction can be rescinded under these circumstances
Breach of fiduciary duty. In these contracts the trustee owes a duty of undivided loyalty and utmost good faith and is obliged to make full disclosure and failure of disclosure may lead to the contract being rescinded.

SPECIFIC PERFORMANCE
It’s an equity remedy which compels a party to execute a contract according to the precise terms agreed upon or to execute it substantially so that under the circumstances, justice will be done between the parties.

It operates in relation to the entire contract and not merely a part of the agreement. The claimant has to come with clean hands and to apply for relief without unreasonable delay. It grants the plaintiff what he actually bargained for in the contract rather than damages for not receiving it. Thus specific performance is an equitable rather than legal remedy. By compelling the parties to perform exactly what they had agreed to perform exactly what they had agreed to perform, more complete and perfect justice is achieved than by awarding damages for breach of contract.
It can only be granted only by a court in the exercise of it’s equity powers subsequently to a determination of whether a valid contract that can be enforced exist and an evaluation of the relief sought. As a general rule specific performance is applied in breach of contract actions where monetary damages are inadequate

SUBROGATION
This is a substitution of one claimant by another and it enables the acquisition of the others rights as against a third party. It allows say an insurance company who has paid out under a policy to take over the legal rights of the insured and sue any wrongdoer for the loss it has incurred. It’s also useful remedy where the claimant’s money is employed by the defendant to discharge a secured creditor There are two types of subrogation, which is legal and conventional. Legal subrogation arises by operation of the law whereas conventional subrogation is as a result of a contract. The purpose of subrogation is to compel the ultimate payment of a debt by the party who in equity and good conscience should pay it and it’s used to avoid injustice. The right of legal subrogation can be either modified or extinguished through a contractual agreement and it cannot be used to replace a contract agreed upon by the parties. Conventional subrogation arises when one individual satisfies the debt of another as a result of a contractual agreement that provides that the claims or liens that exist as security for the debt be kept alive for the benefit of the party who pays the debt. It’s necessary that the agreement be supported by consideration; however it does not have to be in writing.

INJUNCTIONS
Injunctions are orders of the court telling a party to a lawsuit to do or not to do a certain thing they should be no more burdensome to the defendants than necessary to provide complete relief to the plaintiffs. They are classified as mandatory prohibition, preventive and permanent.
Permanent injunctions are granted after a full-blown trial on merits. Temporary restraining orders are granted after a brief hearing where evidence may be presented by affidavit. They may be granted without a hearing or notice provided there is some exigent circumstance or necessity. Prohibitive injunctions command a party to refrain from doing something. Mandatory injunctions command a party to affirmatively do something. An injunction which has been issued by a court of equity and properly served must be obeyed no matter how erroneous the court was in issuing it and unless the decision is reversed by the appellate court, it must be respected and violation of the order may be punished as contempt of court.The purpose of the preliminary injunction is to maintain the status quo between the litigants pending the final determination of the case.

RECTIFICATION
As an equitable remedy available in equity rectification is available to amend terms of the contract better to reflect the true intentions of the contracting parties. It’s available in circumstances of common mistake only in unilateral mistakes in terms of fraud or similar unconscionable behavior also in respect of voluntary settlement to reflect the settler’s real intention. The court may order delivery or cancellation of documents.
The purpose and nature of remedy of rectification is not to set aside but rather to amend its terms to reflect the real intention of the parties and it’s restricted to the written documents. Rectification does not alter the nature of the agreement on the grounds that equity does not intervene in the contractual obligation and freedom of the parties but it only alters it to reflect the true contractual intention of the parties.
Where there is a common mistake between the parties to contract and it’s possible to ascertain their true contractual intention the court is able to order the rectification of the written document. The common intention of the parties to the contract must demonstrate as to support the claim for rectification. It’s important to demonstrate the document contradicted the common intention set out in that agreement.
In unilateral mistakes it’s only available in cases of fraud or similar unconscionable behavior where the defendant was guilty of fraud in permitting the claimant to enter into the contract under a mistake, where the defendant knew that the claimant considered the mistaken element to be a term of the contract and where one of the parties to the contract knows of the mistake and nevertheless allows the other party to enter into the contract a form of equitable estoppels will prevent the person resisting a claim of rectification. Rectification might also be available in respect of voluntary settlements to reflect the settlers evident intention in rectification of a will where it can be demonstrated that the will as adopted did not express the clear intention of the testator.

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