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English law, by contrast, the aggrieved party is not entitled to specific performance, which is an equitable remedy subject to the discretion of the court and which will not be granted in a number of circumstances. Scots law has been influenced by English law in this area, to the extent that the courts exercise an equitable control over the grant of the remedy and have borrowed many of the rules which limit specific performance in England. Moreover, in practice on the Continent specific performance is granted only relatively rarely. This means that the outcome in particular cases is often much the same in England, Scotland and the Continent The pri right to specific enforcement with a number of exceptions mainly drawn from the English he subject(Art 9.102(2). Nevertheless that a difference exists betwe where specif ic performance is a right rather than a remedy within the discretion of the court is suggested by the contrasting outcomes of recent cases in Scotland and England on sO-called keep open' clauses in commercial leases. In both countries commercial leases are typically of several years' duration In the cases, changing commercial circumstances led the tenants to withdraw prematurely from the leases In England the House of lords refused to grant specif ic performance to the landlords, on the grounds that the order could not be used to compel someone to trade at a loss, 22 whereas the Scottish courts upheld the landlords'claim and ordered the tenants to continue to implement the contract. 23 While there may seem to be economic inefficiency in compelling a party to the sanctity of contract and the overall risk allocation in long-term bargains; it also mearg ga trade at a loss and against its will, the Scottish approach seems preferable to me in uphold that the onus of find ing a new tenant falls on the existing tenant rather than the landlord, that is to say, the contract-breaker pays the costs of breach up-front, rather than later in a claim for damages 5. The exceptio non adimpleti contractus -retention Another remedy in the Principles(Art 9: 201)which is found in Scots and Continental contract laws is the right to withhold performance until the other party performs-the exceptio non adimpleti contractus(defence of the unperformed contract). 24 The remedy is in the nature of a suspension of performance, and there is no precise equivalent in the English law of remedies,25 which emphasises termination and damages, although its rules on conditions precedent and subsequent and on order of performance provide some analogues.26 Edinburgh University PhD, 1989 22Cooperative Insurance Society Ltd v Argyll Stores(Holdings)Ltd [1998]AC 1 23 Retail Parks Investments Ltd v The Royal Bank of Scotland Ltd (No 2)1996SC 227 24The comparative position receives detailed treatment in Treitel, Remedies, pp 245-317. For the Scots law of retention and mutuality see McBryde, pp 303-309, and for comment on the latest case( Bank of East Asia v Scottish Enterprise 1997SLT 1213), see idem, " Mutuality retained, (1996)1 Edinburgh Law Review (ELr) 135-39 25Treitel, Remedies, pp 299-317 26Ibid,pp.255-99English law, by contrast, the aggrieved party is not entitled to specific performance, which is an equitable remedy subject to the discretion of the court and which will not be granted in a number of circumstances. Scots law has been influenced by English law in this area, to the extent that the courts exercise an equitable control over the grant of the remedy and have borrowed many of the rules which limit specific performance in England. Moreover, in practice on the Continent specific performance is granted only relatively rarely. This means that the outcome in particular cases is often much the same in England, Scotland and the Continent. The Principles reflect this, and indeed the development of Scots law, when they qualify the right to specific enforcement with a number of exceptions mainly drawn from the English rules on the subject (Art 9.102(2)). Nevertheless that a difference exists between a system where specific performance is a right rather than a remedy within the discretion of the court is suggested by the contrasting outcomes of recent cases in Scotland and England on so-called ‘keep open’ clauses in commercial leases. In both countries commercial leases are typically of several years’ duration. In the cases, changing commercial circumstances led the tenants to withdraw prematurely from the leases. In England the House of Lords refused to grant specific performance to the landlords, on the grounds that the order could not be used to compel someone to trade at a loss,22 whereas the Scottish courts upheld the landlords’ claim and ordered the tenants to continue to implement the contract.23 While there may seem to be economic inefficiency in compelling a party to trade at a loss and against its will, the Scottish approach seems preferable to me in upholding the sanctity of contract and the overall risk allocation in long-term bargains; it also means that the onus of finding a new tenant falls on the existing tenant rather than the landlord, that is to say, the contract-breaker pays the costs of breach up-front, rather than later in a claim for damages. 5. The exceptio non adimpleti contractus - retention Another remedy in the Principles (Art 9:201) which is found in Scots and Continental contract laws is the right to withhold performance until the other party performs - the exceptio non adimpleti contractus (defence of the unperformed contract).24 The remedy is in the nature of a suspension of performance, and there is no precise equivalent in the English law of remedies,25 which emphasises termination and damages, although its rules on conditions precedent and subsequent and on order of performance provide some analogues.26 Edinburgh University PhD, 1989. 22Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1. 23Retail Parks Investments Ltd v The Royal Bank of Scotland Ltd (No 2) 1996 SC 227. 24The comparative position receives detailed treatment in Treitel, Remedies, pp. 245-317. For the Scots law of retention and mutuality see McBryde, pp. 303-309, and for comment on the latest case (Bank of East Asia v Scottish Enterprise 1997 SLT 1213), see idem, ‘Mutuality retained’, (1996) 1 Edinburgh Law Review (ELR) 135-39. 25Treitel, Remedies, pp. 299-317. 26Ibid, pp. 255-99
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