Week 8: Breach Of Contract: Self-Help Flashcards
What are the self help remedies?
Retention, Repudiation and Rescission
What does each require?
Retention requires mutuality
Rescission requires materiality
Repudiation requires knowledge in advance of breach
What is a breach?
Total or partial failure to perform
Defective performance
Failure to perform on time set by contract
What are the judicial remedies?
Specific implement
Interdict
Damages
What is mutuality?
Obligations match up, retention means not doing the obligation that lines up with the breach.
Graham v United Turkey Red
Commission agent sacked for breach, not entitled to commission post breach.
Turnbull v McLean
Guilty party can’t sue innocent party for not doing contract as they breached first
McNeil v Aberdeen City Council
Employee in breach still claim for unfair dismissal against employee. Mutuality of contract, employers retention didn’t align with employees breach. Mutual trust and confidence still required from employer
What is retention
Withhold or suspend ones own performance in response to breach on other side as way of bringing pressure.
Cases for claims being reciprocal
Bank of East Asia v Scottish Enterprise
SE contract Millers who need funds to finish job. Borrowed from BE
SE owed 400k but withheld due to beaches from millers of 160k. Millers turn solvent and consequential losses.
Millers entitled to reduced payment. Mutuality, SE owed BÉA 400k minus millers breach.
What level of materiality is needed for retention?
As per Inversk plc v Tullis Russell papermakers
Materiality required, not as much as rescission
Issue with complex legal ideas of mutuality but brings fairer results
What is Rescission?
The rightful act of a party indicating that as a result of a material breach they no longer are required to fulfil contractual obligations for the future
Entails restitution but doesn’t affect accrued rights as per Graham v Turkey Red
What is a material breach?
One that goes to the root of the contract as per Wade v Walden
Two cases?
Wade v Walden
Wade doesn’t send bill matter, Walden cancels show. Didn’t justify termination since not root of contract
Macari v Celtic
M was manager, didn’t live where he was meant to. Material breach so dismissal fair although there was lack of mutual trust. M was picking and choosing obligations to perform
What is an example of material breach
Right of rejection from buyer
What is termination?
Prospective and stops obligations for future but doesn’t mean previous ones are stopped, like void and void able.
Rights accrued before termination survives. Parties can provide what will happen at termination, these provisions survive termination
Example case of survival of clauses?
Photo Production v Securicor Transport
PP hire ST for security but security burn down their factory. Contract terminated, claim of damages.
Clause said security couldn’t be held responsible, held was binding despite termination. Contract as a whole not terminated, only obligations
