Five FAQs on breach of contract

When is a contract breached?

A contract is made up by terms, normally called clauses. When one of these clauses is breached, this is a breach of contract. There are also terms that are implied by law. This means that even though the term is not written in the contract (express terms) they are implied by law and can be breached in the same way that an express term can be breached.

When can you sue for breach of contract?

You cannot sue for all breaches of contract. The terms of a contract are characterised as either conditions or warranties. This distinction is sometimes also referred to as fundamental terms and non-fundamental terms. Usually, only a breach of a condition, or fundamental term, constitutes a breach of contract for which the innocent party can sue the breaching party. Breaches of warranties, or non-fundamental terms, will not usually give rise to grounds for legal action.

What are the alternatives to suing for breach of contract?

If suing for breach of contract is not suitable in the circumstances, negotiation between the parties may resolve the problem. The breaching party may agree to compensate the innocent party for any losses they have incurred as a result of the breach. Alternatively, the contract may provide for any dispute to be resolved through arbitration. For non-commercial contracts, such as family agreements, mediation may be suitable.

What remedies can be awarded for breach of contract?

The usual remedy for breach of contract is damages. Damages are financial compensation. Damages may be liquidated or non-liquidated damages, depending on the terms of the contract. A less common remedy available for breach of contract is specific performance. Specific performance requires the person who breached the contract to perform their obligations under the contract. Alternatively, the contract may be rescinded, or terminated.

How can a solicitor help with breach of contract?

A solicitor can advise you on whether your contract has been breached. A solicitor can also advise on the best course of action to remedy a breach of contract. If the matter goes to court, a solicitor can represent you. It is advisable to seek advice from a solicitor with experience in the area of law in which the contract is made, such as family law or international trade.

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