Breach of contract and remedies Flashcards
What are the contract terms?
1) Express terms
2) Implied terms
3) Conditions
4) Warranties
What are the express terms?
These are terms which are specially stated in the contract and are binding
What are the implied terms?
These are the terms which are not specifically included in the contract.
(They are not express terms ) but are implied through legislation or through custom of that trade. For example, terms implied through the sale of Goods Act
What are the conditions?
These terms are a fundamental part of the contract and if the conditions are broken, the party who broke the term will be in
breach of the contract. Broken conditions will end the contract.
What are the warranties?
These are terms within a contract that are of lesser importance, even when they are not adhered to, the contract is still ongoing and does not automatically end. The party who broke the warranty may have to pay
compensation to the other party but the contract should go on.
What are the breach of contract?
When terms and conditions or warranties of a contact are
not fulfilled or met the party not meeting them will be in breach of contract
Type of remedies for breach of contract
1) Action for damages
2) Action for price
3) Specific performance
4) Retention of title
5) Quantum meruit
6) Injunction
Remedy for breach of contract - Action for damages
What does it mean?
Recovery of damages on compensation for any loss suffered as a result of the breach , this is a basic remedy for breach
of contract
Remedies for beach of contract - Action for price
What does it mean?
For the failure to pay the debt the seller can bring a court action to recover the price of the goods ie the amount outstanding
Remedies for breach of contract - Specific performance
What does it mean?
The seller can get a court order to force the other party to complete the contract
Remedies for breach of contract - Retention of title
What does it mean?
The seller may have included a tem in the contract that , the goods remain in the property of the seller until full payment is received,
This would require the goods to be returned to the seller
Remedie sfor beach of contract - Quantum meruit
What does it mean?
Payment may be ordered for be part of the goods or services received if the contract has been part- completed
Remedies for breach of contract - Injunction
What does it mean ?
One party to the contract could be ordered not to do something
Bringing dispute to court
Solicitors requirements - details
1) The goods or services provided
2) The date of the liability
3) The exact name and trading status of the customer
4) Background information ) perhaps previous disputes
5) Copies of unpaid invoices
Claims
Claims under £ 10000 :County court, Small Claims Track
Claims between £10000 and £25000: County court, Fast - track
Claims over £25000: County court or High Court, Multi- track
Claims
Claims under £ 10000 :County court, Small Claims Track
Claims between £10000 and £25000: County court, Fast - track
Claims over £25000: County court or High Court, Multi- track
What is the garnishee order?
This enables the direct payment of the debt by one of their own
receivables
What is the attachment of earnings order ?
This means payment is take directly from the receivable’s salary or wages by their employer and is then paid over to the claimant.
This order is only suitable if the court order is against an individual who is in stable employment
What is the warrant of execution?
The goods are seized by a court bailiff from the receivable and sold by public auction nithe proceeds going to pay off the debts
What is the administrative order?
This is an agreement to make fixed regular payments to clear the debt
Receivership
This is the appointment of receiver to collect money owed to the receivable so payments of debts can then made out of it
What is the charge over property?
The legal charge is placed on property owned by the receiver and
when that property is sold the monies are used to pay the debt
Receiving payments under a court order
Bankruptcy and liquidation
Action for price
Taking legal action in the courts for recovery of an unpaid debt
Warrant of delivery
An order for the court bailiffs to seize goods belonging to the seller and held by a customer who owes money to the seller
What is a statutory demand?
A formal demand for at least £5000 made by the person or company owed money and issued to an individual
Statutory demand
1) Should be made within 4 months of the debt
2) If the debt is older then four months a court has to be
contacted to explain the reasons behind the delay
Retention of title clause
This clause canbe included within a credit agreement and
will state that the title ( legal Ownership) of the goods will not
transfer to the buyer until payment for the goods is made in full.
This means that if the debt is not paid the seller is entitled to take
back the goods, so if the customer goes out of business the goods
can be retrieved before the liquidation process starts
Basic retention of title clause
1) A right for the seller to enter the buyer’s premises to repossess the goods. This is to ensure that the seller is not committing a trespass
when doing so.
2) An obligation on the buyer to store the goods separately from
goods belonging nothind parties, or mark then as the seller’s property.
This is so the seller can identify and retrieve the items that belong
to them
3) Retrieve the specific goods
4) the goods relates to the specific invoice
5) have to take the specific goods relates to the invoice
All monies clause
1)This reserves title in all goods supplied to the buyer until the
buyer has settled all outstanding invoices from the seller.
This avoids the need to relate specific goods at the buyer’s
premises with specific unpaid invoices
2)We can take any of the goods on the premises
3)Do not need to identify the goods
Once a court order has been made then the money can be collected in a number of ways.
A Warrant of Delivery is
The lawful owner gains a court order that states that items must be returned
