How to Seek an Injunction to Prevent a Breach of Contract

Where a party to a contract has agreed not to do something,  injunctions can be granted by the court. An injunction can either restrain a party from breaching a contract where there has been a threat of a breach, or restrain a party from continuing or repeating a breach that has already occurred. This is known as a prohibitory injunction.

Before an injunction is ordered, it must be established that an award of damages is not an adequate remedy. This test has a very high threshold. Traditionally, injunctions were only granted to protect a party’s proprietary rights. However, case law has expanded the use of injunctions and injunctions are no longer limited to protecting proprietary rights.

Mandatory Injunctions

There are two kinds of mandatory injunctions: mandatory restorative injunctions and mandatory enforcing injunctions.

Mandatory restorative injunction compels a defendant to repair the consequences of their wrongful act. It must be established that the wrongful act had it only been threatened and not occurred, would have resulted in a prohibitory injunction. An example of when a mandatory restorative injunction may be granted is where a defendant has constructed a house contrary to a restrictive covenant (a clause preventing a particular action). If there had only been a threat of a party building that house, the plaintiff would have been entitled to a prohibitory injunction. So in circumstances where the house has actually been built, the Court may order a mandatory restorative injunction requiring the house to be demolished.

Factors that the Court will consider before granting a mandatory restorative injunction include:

• the defendant’s knowledge of the wrongful nature of the act;
• whether completion of the act has been accelerated;
• hardship caused to the plaintiff if the injunction is not granted;
• hardship caused to the defendant if the injunction is granted; and
• whether an award of damages is adequate.

Mandatory enforcing injunction – compels the defendant to do some positive act. It is unlikely that a mandatory enforcing injunction will be granted unless the remedy of specific performance is also available.

Perpetual and Interlocutory Injunctions

Injunctions can also be perpetual or interlocutory in nature. Perpetual injunctions are granted at the end of a hearing in final settlement of the parties’ dispute. Interlocutory injunctions, on the other hand, are made before a final hearing and are generally to be in force until the Court has made final orders in the matter. An application for an interlocutory injunction is made on an urgent basis.

Two requirements must be considered before an interlocutory injunction will be granted:

• The plaintiff must establish a prima facie case, that is, they must put forward enough evidence to indicate a probability that at the final trial of the matter, the plaintiff is entitled to relief.
• The injury to be suffered by the plaintiff if the injunction is refused is to be balanced with the injury that would be suffered by the defendant if the injunction is granted.

A common condition of granting an interlocutory injunction is that the plaintiff provides an undertaking to compensate the defendant for any damage suffered as a result of the interlocutory injunction, in circumstances where it is later held that the interlocutory injunction should not have been granted. An injunction will generally not be granted if such an undertaking is not provided.

Next Steps

You must act quickly if you believe you need to obtain an injunction against a party to your contract. You should obtain legal advice to ascertain your prospects of success. LegalVision’s contract lawyers can provide you with advice on injunctions and your contract.