Week 10: Breach of Contract Remedies and Termination Flashcards
What are three instances which may constitute a breach of contract?
- Non-performance
- Defective performance
- Late performance
What is the term for when a party communicates that there will be a failure to meet the terms of the contract?
Anticipatory breach.
What are the three instances of justified breaches of contract?
- Other party in breach
- Non-cooperation of the party
- Impossibility
What is meant by mutuality in reference to breaches of contract?
Just because of a failure by one party to meet the terms of the contract, that doesn’t entitle the other party to fail to meet the terms of the contract. Both parties must fulfil their obligations.
What is meant by materiality in reference to breaches of contract ?
If a breach does not go to the root of the contract, this will not allow the other party to rescind their performance.
Which case highlights materiality?
Wade v Walton
Facts:
o Wade was a comedian
o Walton Glasgow pavilion employed Wade to perform
o A term of the contract was that artists had to provide a bill 14 days before performance
o This term was not met
o Walton refused to allow Wade to perform
Judgement:
o It was argued that the breach wasn’t severe enough to constitute a rescind
What are the three options available to the wronged party should the other party repudiate their obligations?
o Rescind and sue for damages
o Wait until time for performance and then sue for damages
o Perform and sue for contract price
What is the term for when a court orders performance?
Specific implement.
Which case highlights specific implement?
AMA (New Town) v Law
What is the term to describe a party’s refusal to carry out future obligations due to their counterparts breach of contract?
Recission
What are the two self help remedies available as a means of enforcement in the event of a breach?
- Retention (Performance)
- Lien (Retaining possession)
What are the five judicial remedies available as a means of enforcement in the event of a breach?
- Declarator
- Action for payment
- Specific implement
- Interdict
- Damages
What is the distinction between an action for payment and damages?
Damages may also allow for inconvenience or emotional harm.
What is the term for damages additional to that which would contitute restitutio in integrum e.g. emotional harm, inconvenience etc.
Solatium.
Which case highlights solatium?
Diesen v Samson
What are the two limiting principles of damages?
- Causation
- Remoteness
Which case highlights remoteness in reference to damages?
Hadley v Baxendale
What was the two pronged test outlined in Hadley v Baxendale to determine the remoteness of damages.
Rule 1: Did they have reasonable contemption that the breaches may occur
Rule 2: In some cases there may be an idea of separateness - additionally there are special damages would be claimed
What are the two lawful methods of terminating a contract?
- Performance
- By agreement
What are the 4 other methods of termination?
- Confusuion
- Compensation
- Prescription
- Frustration
What is the principle of confusion.
You cannot be both a debtor and a creditor.
What is the principle of compensation?
When two parties owe each other obligations.
What is the principle of prescription?
Proceedings must be brought within a reasonable time following failure to perform.
What is the term to describe when there becomes a new debtor?
Delegation.
What is the term to describe when there is a new replacement contract ?
Novation.
What is the principle of frustration.
When a radical change of circumstances makes completion of the contract impossible.
