Remedies for breach of contract
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Remedies for breach of contract
It goes without saying that it is vital that a contract is in place before proceeding with any business deal. Even so, agreements can often go wrong and breaches occur. This blog gives an understanding of what types of breaches of contract can arise and provides remedies for breach of contract.
Do you have a valid contract?
It is important to be sure a contract was formed. English law allows a contract to be oral or written and some terms can even be implied, but there are also four elements that characterise the existence of a contract.
The first element is a valid offer, which must then be accepted, the acceptance. Then there must be consideration, which means the price given for services or goods, or a promise to do (or not to do) something in return. The final element is the intention to create legal relations between the parties.
Has there been a breach?
A breach of contract can occur in many different ways. If the other party refuses to perform their obligations set out in the contract. Alternatively, if they are late paying for goods or services provided, or maybe they didn’t pay at all. Maybe you have paid for a service or goods which differ from what was expected within the contract? These breaches normally fall within four different categories of breaches:
- A minor breach can occur when the breach of the contract is so insignificant that the remaining of the contract can still be performed. For example, where obligations under the contract have been partially executed or where goods have been substituted by other goods that seem to fit from the other party’s point of view.
- A material breach is when the breach has adverse consequences on the goods or services provided to an extent that the contract cannot be performed as the breach goes to the heart of the contract.
- A fundamental breach, or repudiatory breach, is when the breach is so important that the innocent party will seek termination of the contract rather than damages.
- An anticipatory breach is when a party expressly states that they will not perform the contract.
What are the possible remedies for breach of contract?
The choice of remedies really depends on the individual circumstances of the case. The following are examples of possible outcomes:
- Repudiation: This is the right to terminate the contract and seek compensation for the loss a party might have suffered from the breach.
- Specific performance: can be obtained by way of Court order to force the other party to complete their contractual obligations.
- Damages: are intended to put the innocent party in the position they would have been in if the obligations pursuant to the contact had been fulfilled.
- Rescission: returning to the position the parties were in before the existence of the contract effectively voiding the contract.
- Injunctions: to force a party to do or not to do something.
So what do you need to prove?
When making a claim for breach of contract, one must prove that there was a contract in place, that the other party has breached this contract and that you as the claiming party suffered a loss as a result of the breach.
Summary
Due to the individual circumstances surrounding any contract, it is vital to discuss your situation with a lawyer so you can be provided with sound advice as to what remedies for breach of contract are available. If you are experiencing any contract issues, please contact Christina Spiers.