OCR A2 Law - The Law of Contract - Breach (1)

  • Created by: Majid
  • Created on: 12-05-13 20:13

Breach (1)

There are 2 main ways in which a contract can be breached:

1. Breach in performance: This is when a term is breached. A Condition is a major term of a contract, a breach allows an innocent party to 'repudiate' and/or claim 'damages'.CASE: "Poussard v Spiers". In this case an actress had a contract to turn appear as a lead role but failed to turn up and they gave her role to the understudy. The actress sued for breach of contract. HELD: The producer was allowed to repudiate the contract.AO2: This can create certainty for both parties should a breach occur.

Warranty: Is a minor term of a contract, a breach of which will allow an innocent party to claim damages only - contract continues.CASE: "Bettini v Gye". In this case, facts were similar to "Poussard" except a singer was 3 days late for rehearsals. HELD: Just a breach of warranty as it didn't allow the producers to repudiate.

Innominate term: is a term without classification - the court looks at seriousness of the breach.  A 'substantial deprivation' of the entire contract will allow for repudiation.First discussed in ---> CASE: "The Hong Kong Fur Shipping Case". A ship was out of service for 18 weeks, when the claimant tried to call off the contract.AO2: Lord Diplock stated the courts mustn't classify the terms into 2 strict categories - conditions and warranties - applied in "Reardon Smith v Hansen Tangen".In this case a ship was meant to be built in the Osaka shipyard, but it was full and was built in the Oshima shipyard instead to the same specifications, and the buyer refused to accept the delivery on the grounds it was a breach of a term/condition. HELD: It was a technical breach with no bearing on the outcome and the buyer couldn't repudiate the contract. - E.g. of a breach of an innominate term.

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