Contract Law - Remedies for Breach of Contract
[STEP 1]: Identify the problem
There is a sale of goods / services / goods and services contract between C and D for
[INSERT CONSIDERATION FROM ONE PARTY].
What is the term in dispute?
There is an issue with the express term to [INSERT EXPRESS TERM]. D owes / has
paid C X amount.
STEP 2: How was the contract discharged?
Here, the contract may be discharged by X / [INSERT C] may rely on X.
Breach
[INSERT TERM] is a condition / warranty / innominate term as it goes to the root of the
contract / is less important / is neither a term or condition (Hong Kong Fir Shipping).
This means [INSERT INNOCENT PARTY] can sue for damages, and terminate and / or
affirm the contract. Here, [INSERT C] will want to terminate so the contract ends and
future obligations are discharged. The decision to terminate must normally be
communicated to the other party / affirm and keep the goods / cannot terminate as the
contract has already been performed (defectively by [INSERT D]), but can affirm so that
the contract is not over and both parties should continue to perform their obligations.
[IF UNCLEAR] It may be a condition that goes to the root of the contract, a warranty
that is less important, or an innominate term that is neither (Hong Kong Fir Shipping).
The court will ask whether a reasonable person would think the parties intended the
term to be a condition or a warranty.
- Generally, if the effect of a breach of the term deprives the innocent party of the
whole benefit of the contract, the term is a condition. If not, it is a warranty.
- The use of the term ‘condition’ raises a presumption of a condition, which may be
rebutted from evidence from the contract as a whole (Schuler v Wickman
Machine Tool Sales Ltd).
, [IF IMPLIED TERM] As this is a sale of goods / services contract and [INSERT D] is
acting in the course of a business, there is a breach of the implied condition /
innominate term for [INSERT TERM].
- Condition - This is a repudiatory breach and the innocent party may terminate
the contract and sue for damages.
- Innominate - The effect of the breach deprives the innocent party of substantially
the whole benefit of the contract, this is a repudiatory breach and the innocent
party may terminate the contract and sue for damages. Otherwise. they may sue
for damages but cannot terminate (Hong Kong Fir Shipping).
- Generally, it will not be possible to terminate if a contract has been fully
performed. But, a buyer may give their goods back and get their money back in
sale of goods contracts if the seller breaches s.13 or 14 SGA 1979, or s.9, 10, 11
CRA 2015.
Doctrine of complete performance
The general rule is that a party only has to perform their obligations when the other
party has performed their part of the contract. Performance of contractual obligations
must be precise and exact (Cutter v Powell).
Exceptions:
However, [SELECT RELEVANT SCENARIO FROM BELOW]
- When there is wrongful prevention of performance by the other party
- C can recover damages including lost profit, subject to issues of
remoteness and mitigation (Robinson v Harman).
- C can claim a reasonable amount for the work they have done (quantum
meruit) (Planché v Colburn).
- Voluntary acceptance of partial performance by the other party
- D must have the option to take or not take the benefit of the work done
(Sumpter v Hedges).
- If this exception applies, the person who has done the work can claim
quantum meruit.
- Substantial performance
- [INSERT D] may be able to rely on substantial performance as the work is
finished but slightly defective.
[STEP 1]: Identify the problem
There is a sale of goods / services / goods and services contract between C and D for
[INSERT CONSIDERATION FROM ONE PARTY].
What is the term in dispute?
There is an issue with the express term to [INSERT EXPRESS TERM]. D owes / has
paid C X amount.
STEP 2: How was the contract discharged?
Here, the contract may be discharged by X / [INSERT C] may rely on X.
Breach
[INSERT TERM] is a condition / warranty / innominate term as it goes to the root of the
contract / is less important / is neither a term or condition (Hong Kong Fir Shipping).
This means [INSERT INNOCENT PARTY] can sue for damages, and terminate and / or
affirm the contract. Here, [INSERT C] will want to terminate so the contract ends and
future obligations are discharged. The decision to terminate must normally be
communicated to the other party / affirm and keep the goods / cannot terminate as the
contract has already been performed (defectively by [INSERT D]), but can affirm so that
the contract is not over and both parties should continue to perform their obligations.
[IF UNCLEAR] It may be a condition that goes to the root of the contract, a warranty
that is less important, or an innominate term that is neither (Hong Kong Fir Shipping).
The court will ask whether a reasonable person would think the parties intended the
term to be a condition or a warranty.
- Generally, if the effect of a breach of the term deprives the innocent party of the
whole benefit of the contract, the term is a condition. If not, it is a warranty.
- The use of the term ‘condition’ raises a presumption of a condition, which may be
rebutted from evidence from the contract as a whole (Schuler v Wickman
Machine Tool Sales Ltd).
, [IF IMPLIED TERM] As this is a sale of goods / services contract and [INSERT D] is
acting in the course of a business, there is a breach of the implied condition /
innominate term for [INSERT TERM].
- Condition - This is a repudiatory breach and the innocent party may terminate
the contract and sue for damages.
- Innominate - The effect of the breach deprives the innocent party of substantially
the whole benefit of the contract, this is a repudiatory breach and the innocent
party may terminate the contract and sue for damages. Otherwise. they may sue
for damages but cannot terminate (Hong Kong Fir Shipping).
- Generally, it will not be possible to terminate if a contract has been fully
performed. But, a buyer may give their goods back and get their money back in
sale of goods contracts if the seller breaches s.13 or 14 SGA 1979, or s.9, 10, 11
CRA 2015.
Doctrine of complete performance
The general rule is that a party only has to perform their obligations when the other
party has performed their part of the contract. Performance of contractual obligations
must be precise and exact (Cutter v Powell).
Exceptions:
However, [SELECT RELEVANT SCENARIO FROM BELOW]
- When there is wrongful prevention of performance by the other party
- C can recover damages including lost profit, subject to issues of
remoteness and mitigation (Robinson v Harman).
- C can claim a reasonable amount for the work they have done (quantum
meruit) (Planché v Colburn).
- Voluntary acceptance of partial performance by the other party
- D must have the option to take or not take the benefit of the work done
(Sumpter v Hedges).
- If this exception applies, the person who has done the work can claim
quantum meruit.
- Substantial performance
- [INSERT D] may be able to rely on substantial performance as the work is
finished but slightly defective.
