Discharge of contract - Breach

Discharge of contract - Breach

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  • Created by: tmcgrail
  • Created on: 16-12-10 11:28

General

  • The victim will always be entitled to damages, whether recission is available as a remedy will depend on what type of term is breached

Condition: an important term of a contract meaning the victim can repudaite and/or claim damages

  • The claimant must be careful to make sure the term is a condition as if it is a warranty and the claimant repudiates then the claimant has breached the contract as there was no right to repudiate.

Warranty: a minor term in a contract, which if breached the victim may sue only for damages and the contract continues

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Anticipatory breach

An anticipatory breach occurs when a party to a contract gives notice in advance to the other party that they will not be performing/completing the contract. The claimant in this situation has a choice either to sue immediately for breach of a condition (ie. to treat the contract as repudiated and/or to claim damages) or to wait for the time for performance of the contract and to sue them.

Hochster v de la Tour (1853):

  • Claimant agreed to work for Defendant as a courier on a tour to start in June
  • D told C he no longer required C's services in May
  • C entitled to sue D immediately - did not have to wait for actual breach
  • Principle: 'anticipatory breach takes place before the due date for performance and allows the claimant to take legal action for the breach immediately without waiting for the due date to see if performance does unexpectadly take place then'
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Remedies

Anticipatory Breach:

  • If the victim claims an anticipatory breach then the claimant can repudiate, ending all future contractual obligations
  • The claim would also be for damages, which aim to put the victim in the position they would have been in had the contract been completed

Actual Breach:

  • If the victim does not choose to accept anticipatory breach he/she may wait until the time for performance of the contract is due then sue for breach of contract
  • Repudiation and/or damages may be claimed
  • Damages would be assessed at the time when performance should have occurred so if the losses have increased due to market factors, then the losses for the victim will be increased
  • However there is a rick that a frustrating event may discharge the contract and leave the victim with NO remedies
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