General Principles of Law of Contract- week 4 Flashcards
Breach of Contract and Remedies
Explain the term: Breach of Contract
a) When one (or both) of the parties fails to honour his/her contractual obligations.
b) Conduct that amounts to failure to honour contractual obligations without lawful excuse (pacta sunt servanda).
c) When a party refuses or fails to perform as he or she agreed to, the contract has been breached. Further, if a party by their actions, omission and without lawful excuse fails to honour his/her contractual obligations, he or she commits a breach of contract.
List the five Forms of Breach of Contract
- Mora debitoris
- Mora creditoris
- Positive malperformance
- Repudiation
- Prevention of performance
Explain the Form of Breach of Contract: Mora debitoris
Where there is late performance or failure to perform the contract timeously or within the proper time, the debtor is in mora (in delay).
List the 4 requirements for Mora debitoris:
- Performance must still be possible
- The debt must be due and enforceable;
- The debtor must have failed to perform timeously; and
- Fault is not required – mere delay by the debtor constitutes breach
Explain the Form of Breach of Contract: Mora creditoris
Creditor delays the due performance by the debtor in circumstances where the debtor requires the assistance of the creditor – acceptance of proper performance
List the five requirements for Mora creditoris:
-Performance must still be possible.
-Creditor delays performance by failure to cooperate timeously.
-Performance must be due and enforceable;
-The debtor must have taken steps to perform timeously without cooperation from the creditor; and
-The creditor’s failure to accept does not have to be caused by his fault
Explain the Form of Breach of Contract: Positive Malperformance
Positive malperformance occurs when the debtor duly performs but poorly or incompletely or defectively.
List the three requirements for Positive Malperformance
~Positive duty – the debtor must have performed (defective)
~Negative duty;
~Fault (not a requirement where the debtor proves force majeure)
Explain the Form of Breach of Contract: Repudiation
Where party to the contract commits the breach, by his words/conduct and without lawful cause, the contracting party indicates to the other party that he or she is no longer bound by the contract and or that he or she will no longer perform the obligations under the contract
List the two requirements of Repudiation
- Conduct or action – debtor communicates his intention not to perform
- Intention to repudiate – must be made objectively
Explain the Form of Breach of Contract: Prevention of Performance
Where either party to the contract renders his own or the other party’s performance impossible through his culpable conduct
after the conclusion of the contract. The party who culpably renders performance impossible is guilty of breach of contract.
What are the requirement for Prevention of Performance?
The only requirement is an act accompanied by fault (intent or negligence)
List the four Remedies for Breach of Contract
- Specific performance
- Cancellation
- Contractual damages
- Interdict
Explain the Remedy for Breach of Contract: Specific performance
(Primary remedy: upholding/fulfilling the contract)
Specific performance happens when a court orders the person who broke the contract to do what he or she promised unless it is impossible to do what was promised or it would be unreasonable to do so.
Explain the Remedy for Breach of Contract: Cancellation
(Extraordinary remedy and have right to cancel: rescinding/ending the contract). Cancellation causes all obligations to end.
No party will claim performance from another- there must be restitution.
An innocent party may cancel the contract if the wrongdoing party failed to carry out
an important part of the contract and reclaim payments.
Usually applies in mora breaches where time is of essence.
For positive malperformance, it is only where the malperfomance is material or substantial.
Also applies for repudiation and prevention of performance.
Explain the Remedy for Breach of Contract: Contractual damages
For financial loss suffered (additional/combination remedy to specific performance/cancellation).
An innocent party may sue for damages when financial loss is suffered as a result of the contract not being carried out properly such as loss of value/loss of profit.
The purpose of claim for damages is usually to place the injured party in a position they would have been in had the breach not occurred.
Explain the Remedy for Breach of Contract: Interdict
An interdict is a court order preventing the wrongdoing party from breaching the contract.
An interdict is an order of court which the innocent part can use to restrain the wrongdoing party from performing a prohibited act or where he is ordered to undo what he/she has already done in contravention of contractual obligations.
An interdict is one of the common law remedies for breach of contract
