Unit 15- Breach of contract Flashcards
What are the two ways in which a contract can be breached?
-Anticipatory breach of contract: a party declares its intention of not performing the contract before
-Actual breach of contract: occurs on due date of performance or during the course of performance
What is the primary aim of law of contract
Protection of contractual expectations
What does remedy mean when theres a breach of contract
When one of the parties breaks contract, the other can ask a court to provide a remedy for the breach
What are the three types of remedies that can be applied
- Specific performance
- Termination of contract
- Damages
What are the two opposing roles that a legal system assigns to contract law?
-Moral approach to contract law –> promises must be fulfilled
-Economic approach to contract law –> conclude contracts to increase welfare
What is the civil law approach to breach of contract?
Plays a strong emphasis on the binding nature of contracts and seeks to ensure that the parties fulfil their roles and obligations
What are the three cases in which there is a breach in contract in civil law
- Non performance
- Defective performance
- Delay in performance
What is the remedy utilised in civil law when theres a breach of contract?
Specific performance
What are the exceptions to the use of specific performance as a remedy?
- Impossibility to perform
- Disproportionate costs
- Contracts involving personal services
What is the common law approach when there is breach of contract?
The general remedy is compensation of damages, specific performance being exceptional
What is efficient breach of contract?
A party should be allowed to break the contract signed and pay damages, if that would be economically more efficient than performing a contract
Termination of contract in civil law
Termination of contract is allowed when the breach is material –> may lead to termination if fundamental
What is a fundamental breach of contract?
A fundamental breach is significant enough to go to the core of the contract and substantially undermines its purpose or essential elements
What are contract terms?
Help determine the rights and remedies available to the innocent party in the event of a breach
What are the different times of contract terms?
- Conditions: if breached the innocent party is entitled to terminate
- Warranties: entitled to claim damages
- Innominate terms: depends
