...Breach of the Contract and Remedies for It Breach of the contract is a situation when buyer or seller does not perform its obligations those are mentioned in the contract. By this way, there are some remedies for breach and the party which one does not fulfill his contractual promise should compensate all damages after breach. The main types of breach of contract are minor, material, fundamental, and anticipatory. Minor is a breach of contract that is less severe than a material breach and it gives the harmed party the right to sue for damages but does not usually excuse him from further performance. That means when a party to the contract fails to perform a part of a contract and the fail is very small and all parties can otherwise fulfil any remaining contractual obligations very easily without any consequences. Paul and Bill, two business partners, hire SevenSeas, Inc. to build them a boat. The contract says that SevenSeas will build the boat according to Paul and Bill’s specifications and that Paul and Bill will pay SevenSeas $2 million. One of the specifications that Paul and Bill lay out is that the boat must contain bullet-proof windows. SevenSeas builds the boat exactly according to specifications except for the windows, for which SevenSeas accidentally uses ordinary glass. Using the guidelines laid out above, the court would most likely rule that SevenSeas’ breach was minor: SevenSeas has basically finished performance, the breach was accidental, Bill and Paul...
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...Debt Period of prescription Judgement debt/mortgage bond 30 years Debt owed to the state 15 years Bills of exchange 6 years Debts arising from contracts (ordinary debts) 3 years. The Remedies for breach of contract. Breach occurs when a party fails to observe one or more sections of the agreed contract. An agreement is meant to be adhered to, so a breach or failer to observe the terms and conditions as well as the instructions thereof calls for certain measure to counter such unethical moves in the world of contracts and agreements. The innocent party will therefore be entitled to remedies for breach of contract. A breach by one party of his contractual obligations does not automatically discharge of the contract even though the contract states that it will do so because the party in breach cannot be permitted to profit from his own wrong by bringing the contract to an end if the innocent party wishes it to continue. A contract may be breached by Anticipatory breach(Madhuku, 2010). It can also be breached by positive malperfomance,...
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...Business I. The essential elements of a contract and the applicable remedies in the event of a breach. Four Essential Elements of a Contract An agreement must contain four essential elements to be regarded as a contract. If any one of them is missing, the agreement will not be legally binding. a. Offer There must be a definite, clearly stated offer to do something. For example: A quotation by sub-contractor to the main contractor and an offer to lease. An offer does not include ball park estimates, requests for proposals, expressions of interest, or letters of intent. An offer will lapse: * when the time for acceptance expires * if the offer is withdrawn before it is accepted * After a reasonable time in the circumstances (generally the greater the value of the contract, the longer the life of the offer). Invitation to treatAn invitation to treat is a mere declaration of willingness to enter into negotiations; it is not an offer, and cannot be accepted so as to form a binding contract. An agreement is not created if there is an acceptance of the invitation to treat.An invitation to treat is part of the preliminaries of negotiation, whereas an offer is legally binding once accepted, subject to compliance with the terms of the offer. For example: Invitations to treat are advertisements, price lists, circulars and catalogues. | b. Acceptance Only what is offered can be accepted. This means that the offer must be accepted exactly as offered without...
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...A. Torts 1. Compensatory and Punitive Damages Tort law involves civil liability between private parties. A plaintiff who wins a tort suit usually recovers the actual damages or compensatory damages that she suffered because of the tort. Depending on the facts of the case, these damages may be for direct and immediate harms, such as physical injuries, medical expenses, and lost pay and benefits, or for harms as intangible as loss of privacy, injury to reputation, and emotional distress. In cases where the defendant’s behavior is particularly bad, injured victims may also be able to recover punitive damages. Punitive damages are not intended to compensate tort victims for their losses. Instead, they are designed to punish flagrant wrongdoers and to deter them and others from engaging in similar conduct in the future. Theoretically, therefore, punitive damages are reserved for the worst kinds of wrongdoing. Punitive damages have always been controversial, but they have grown more so in recent years due to the size of some punitive damage awards and the perception that juries are awarding them in situations where they are not justified. 2. Negligence Defenses The common law traditionally recognized two defenses to negligence: contributory negligence and assumption of risk. In many states, however, one or both of these traditional defenses has been superseded by new defenses called comparative negligence and comparative fault. Contributory negligence is the plaintiff’s...
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...Different states have certain laws on how a buyer remedy or seller remedy can be put into a contract. First we have the buyer which has certain remedies available to him or her if a seller wrongfully refuses to either give title to the real estate or otherwise defaults on an agreement of sale between the parties, unless there is a provision in the agreement that limits the seller’s remedies. Before buyer can do anything, there must be a non-conforming tender (breach of warranty or other breach of contract, such as late delivery. It’s been asked with buying a house, “what happens when the sales of a house doesn’t work out”? In most cases you can take legal action. If a buyer decides not to go through with the purchase they can retain the down payment and terminate the contract, or sue for breach of contract and bring an action for. But there can only be one remedy at a time. If a remedy fails, you may be able to file another lawsuit for a different reason. This could mean the buyer has breach the contract and can also collect addition damages. But always remember that a sales contract may limit your options. Now if the buyer goes through with the lawsuit they will have to file a “lis pendens” in public records. Basically this notice is your property is involved in a lawsuit and you won’t be able to sell the property and no one will even look at the property. When something like this happen the seller is ready and willing and able to sell the property and the buyer...
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...purposes only. Lecture 10 Law of Contract: Discharge of the Contract INTRODUCTION In this lecture, we will first discuss a number of ways in which a contract can be discharged (that is, brought to an end), including the right of termination for major breach of contract. We will then consider the issue of breach of contract in further detail, with a focus on the common law remedy of damages together with the principles by which the Courts can assess damages. We will then discuss the equitable remedies for breach, chiefly specific performance and injunctions, and conclude by considering the issue of expiration of time and the loss of the right to sue. On successful completion of this lecture, you should (within the scope of the course) be able to: identify the ways in which a contract may be discharged describe discharge of a contract by performance describe discharge of a contract by agreement describe discharge of a contract by operation of law describe discharge of a contract by breach describe the remedy set respectively available for breach of condition and warranty describe and understand the remedy of damages and how the quantum of damages is assessed by the Courts describe the principle of causation describe the principle of remoteness describe the types of losses recoverable, and distinguish between pecuniary and non-pecuniary loss describe the duty of mitigation of loss describe the equitable remedies for breach and understand when they apply describe...
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...Breach of Contract & Remedies 1 Breach of contract Nature of breach A breach of contract occurs where a party to a contract fails to perform, precisely and exactly, his obligations under the contract. This can take various forms for example, the failure to supply goods or perform a service as agreed. Breach of contract may be either actual or anticipatory. Actual breach occurs where one party refuses to form his side of the bargain on the due date or performs incompletely. For example: Poussard v Spiers and Bettini v Gye. Anticipatory breach occurs where one party announces, in advance of the due date for performance, that he intends not to perform his side of the bargain. The innocent party may sue for damages immediately the breach is announced. Hochster v De La Tour is an example. Effects of breach A breach of contract, no matter what form it may take, always entitles the innocent party to maintain an action for damages, but the rule established by a long line of authorities is that the right of a party to treat a contract as discharged arises only in three situations. The breaches which give the innocent party the option of terminating the contract are: (a) Renunciation Renunciation occurs where a party refuses to perform his obligations under the contract. It may be either express or implied. Hochster v De La Tour is a case law example of express renunciation. Renunciation is implied where the reasonable inference from the defendant’s conduct is that he no longer intends...
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...Remedies: Breach of Contract Introduction There are various remedies available to an innocent party where there has been a breach of contract. The main remedy is damages, but in certain situations, equitable remedies are available. 1. Unliquidated Damages Unliquidated damages are assessed by the court and are designed to compensate the innocent party for any losses incurred as a result of a breach of contract. However, where loss can not be proved, the innocent party will only be entitled to claim nominal damages. In the case of Surrey CC v Bredero Homes (1993), damages were not awarded defendant who had failed to comply with planning permission because the council had not suffered any loss. This can be contrasted with the case of Chaplin v Hicks (1911) where the court awarded damages to the claimant for the loss of a chance to win a competition. Unliquidated damages are not a means by which to punish the defendant and punitive damages will not be awarded for a breach of contract. They are also not a way to recover any gain made by the defendant as a result of a breach. Loss includes any harm or damage to the claimant themselves or any of their property, including any reduction of value of such property caused by the breach of contract. However, in calculating the loss and awarding damages, if the claimant has obtained any benefit from the breach the court will not usually allow the claimant to be put in a better position than they would have been had the breach not occurred...
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...Law Professor, John Becker May 17 2012 There are two elements of a contract, which are (1) an agreement; (2) legal obligation. To constitute a contract there must be an agreement. An agreement is composed of two elements, offer and acceptance. The party making the offer is known as the offeror, the party to whom the offer is made is known as the offeree. Thus, there are essentially to be two parties to an agreement. They both must be thinking of the same thing in the same sense. In other words, there must be consensus-ad-idem. All agreements are contracts if they are made by free consent of parties, competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Furthermore a contract is a legally enforceable promise or undertaking that something will or will not occur. There should be an intention on the part of the parties to the Law of Contracts agreement to create a legal relationship which may have elements in writing, though contracts can be made orally. A breach of contract occurs when a party who has signed a contract fails to live up to his responsibilities as specified in the contract. There is a range of legal remedies for breach of contract. For example, a person may be entitled to monetary compensation in the event that the other party fails to live up to the terms of the contract. A contract may also be canceled because of a breach or changed to include the terms the parties’ desire. In some cases, a...
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...Sales Contracts – Breaches and Remedies Flavia Ana Guez Business Law for Managers In a business environment, you may at times find yourself caged by circumstances. From time to time, you might have to make decisions that require breaching a contract. As a merchant, the Uniform Commercial Code governs the impact of the breach of your contract whether you are the seller or the buyer. Seller`s remedies for breach of contract If a buyer repudiates/ breaches a contract, the seller`s remedies and options are as follows: • Withhold delivery of the goods • Stop delivery of goods in transit • Resell the goods and recover damages • Recover damages equal to the difference between the market price and the K price • Cancel the contract In a scenario where the seller chooses to resell the goods, the resale must be made in good faith and in a commercially reasonable manner. In this situation, the seller may recover the difference between the resale price and the contract price, together with any incidental damages, but less expenses saved as a result of the buyer’s breach. If the resale of the goods is done via a private sale, the seller must give the buyer reasonable notice of the intended sale. If a reasonable notice is not given to the buyer, the seller might be prevented from recovering under this remedy. If the goods are not resold by the seller, the difference between the contract price and the market price under the contract can be collected...
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...A breach of an employment contract can occur where the parties to a contract fail to perform, precisely and exactly their obligation under the contract. A breach of contract by either party entitles the other party to either accept the breach or sue for damages, or to reject it and sue for specific performance. There are different types of breach of contract that can occur, according to M.R. Freedland. one type is the anticipatory Breach which was particularly developed in relation to the contract of employment to give immediate remedy to the employer for an anticipatory repudiation by the employee and occurs when a party to a contract repudiates his/her obligations under that contract before fully performing those obligations. The recognition of this type of breach occurred in Hochster v De la tour (1853)2 E&B 678 where it was held that the plaintiff, who was engaged by the defendant for three months service as a courier and notified before the engagement begun that that he would not be required, had an immediate action for damages for anticipatory wrongful dismissal, without the necessity to wait for the date on which the service should have begun. M.R. Freedland(1976) The possible remedies one can obtain in Litigation may include the following: Damages - According to M.R Freedland (1976) the remedy for damages for wrongful dismissal or breach of contract of employment is the most important remedy given by the common law, or by the rule of equity for the protection of...
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...Business Law Breach of contract is when a business contract creates an obligation that is to be full filled by people or companies that enter into an agreement. By law a party’s failure to complete the bargain which is under contract is known as a breach of contract. With regard to the specifics of the contract a breach can happen when a party fails to perform on time or does not perform at all according to the terms of the agreement. Breach of contract is categorized as material or immaterial to determine the appropriate legal solution or remedy for the breach (Retures 2012). Compensatory damages put the non-breaching party in the position that they had been if the breach had not happened. Punitive damages are payments that the breaching parties have to pay. Above and beyond the point that would fully compensate the non –breaching party. Punitive damages are meant to punish a wrongful party for a wrongful act and is rarely is used for business contract settling. Specific performance is used when damages are inadequate as a legal remedy. The non – breaching party may seek an alternative remedy which is specific performance. Specific performance is known for describing as the breaching party court ordered performance of duty under the contract. Specific performance might be used as a remedy for breach of contract if the matter is rare or unique. Damages would not suffice to place the non-breaching party in as good a position as they would have been if the breach had not happened...
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...negotiation agreement stipulated that no distribution contract existed unless it was in writing. Just three days before the expiration of the 90-day period, the parties reached an oral distribution agreement at a meeting. Chou offered to draft the contract that would memorialize their agreement. Before Chou drafted the agreement, a BTT manager sent Chou an e-mail with the subject line “Strat Deal” that repeated the key terms of the distribution agreement including price, time frames, and obligations of both parties. Although the e-mail never used the word contract, it stated that all of the terms had been agreed upon. Chou believed that this e-mail was meant to replace the earlier notion that he should draft a contract, and one month passed. BTT then sent Chou a fax requesting that he send a draft for a distribution agreement contract. Despite the fact that Chou did so immediately after receiving the BTT fax, several more months passed without response from BTT. BTT had a change in management and informed Chou they were not interested in distributing Strat. READ ENTIRE DOCUMENT BELOW (2.1) FOR SUPPORTING EVIDENCE: 2.1 The law provides certain relief for aggrieved parties that suffer losses as a result of another party’s breach of contract. These relief mechanisms are collectively referred to as remedies. Recall the distinction discussed in Chapter 1 between remedies at law and remedies in equity. For many contracts, the remedy at law...
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...CLASSIFICATION AND REMEDIES OF TERMS GOH KAH LING* The writer has discussed that contract is a legally enforceable agreement that meets certain specified legal requirements between two or more parties. Terms of contract are statements that made by one party in order to encourage the other party to enter into the contract. It should be clear, promissory and capable of acceptance. Terms of contract can classified as conditions and warranties. Conditions terms are term of major importance which goes to the root of the contract. It entitles innocent party to terminate the contract and sue for damages. Warranties term is a subsidiary term of the contract. It will compensate the innocent party for any loss or inconvenience. It is a hybrid term, sometimes assuming the characteristics of a condition and at other times the characteristic of a warranty. Severity of breach of intermediate terms depends entirely on the legal consequences of the actual situation Breach occurs where a contract has come into being and one or other of the parties fails to perform all or some part of the obligations under it. There are four main remedies available to the wronged party: Specific performance, injunction, damages and restitution. CONTENTS I | Introduction | 2 | II | Terms | 2 | III | Conditions Terms | 3 | IV | Warranties Terms | 4 | V | Intermediate Terms | 5 | VI | Remedies | 7 | | (i) Specific Performance | 7 | | (ii) Injunction | 8 | | (iii) Damages | 8...
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...basis in many businesses. The next primer you will prepare for your department's training series will acclimate your colleagues to the world of contracts. Prepare a 2–3-page, double-spaced document explaining the essential elements of a contract and the applicable remedies in the event of a breach. What is required for a valid offer? How can one accept an offer? What is the concept of consideration and what form(s) can consideration take in creating a contract? What factors must be considered in assessing the legal sufficiency of an offer, acceptance, and consideration in determining whether a contract is enforceable? In the event that a contract is formed and subsequently broken, what remedies are available to the non-breaching party under your state's law? Business plans are met through voluntary agreements amongst others. These voluntary agreements are also known as contracts. A contract focuses on holding a promise that is directed towards the future. Business cannot be successful unless people fulfill their promises. There also needs to be a system of punishment to those who break their promises. Making all contracts more of an obligation to complete, which allows business to continue today. Forming a contract involves a person, known as the offeror, who offers a promise to another person or party, known as the offeree. A contract could focus on a number of things, but whatever the subject, the main focus is in future performance. The science of management would fail...
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