Contractual Breach and Injunctive Relief

The Court of Appeal has refused to allow a “mechanistic” application of the “damages are an adequate remedy” rule to prevent the victim of a contractual breach from obtaining injunctive relief in order to enforce compliance with the primary obligations under the contract.

It held that an applicant for an interim injunction was entitled to argue that damages could not be an adequate remedy for a threatened breach of contract because the recoverable damages were limited by a clause excluding or limiting liability for the kind of loss likely to be caused by the breach.

This was an issue on which there were conflicting authorities and it is helpful that the court has now confirmed the less restrictive approach.

Written by James Naylor

Partner, CG Naylor LLP.