A contract is a promise or an agreement between two or more parties that is legally binding.

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It can either be made expressly in writing or implied, either by words or by conduct.  A contract arises when an offer is made to one party, which is then accepted by another.  There must be a clear intention on both sides to be bound by the terms of the agreement, and it therefore becomes legally binding.  

 

• Offer

• Acceptance of specific terms or obligations

• the parties' intention to create legal relations and form an agreement, and

• Consideration (where one party promises to do something in return for receiving a right, interest or benefit promised by the other party)

All of the above are essential components of a legally binding contract.

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Everyone of us enters into a contract when money is exchanged for goods between us as a customer and a retailer. 

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What constitutes a breach of contract?

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A breach of contract occurs when one party to the agreement fails to fulfil an obligation or breaks the ‘Terms and Conditions’ of that agreement.   A breach of contract can occur in various ways examples can be found here. If you do not pay for goods or services provided by another party, or if you do pay and you do not receive those goods and services at all or to an acceptable standard, a breach of contract has arisen.

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Suing for Breach of Contract

 

There are various stages to be met for proving a breach of contract.

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1. The existence of a contract.  This can be one in writing where you have all the terms you agreed set down clearly.  However, it may be by word, or by the conduct of the parties.  A contract formed orally, tends to become a problem when arguing breach of contract. Having no written evidence of the agreement makes it difficult to show conclusively that one existed.  The best advice where you enter into any contract as described above, is that it is always best to ensure that, if at all possible, the terms are recorded in writing: letters and emails can be useful evidence when proving the existence of a contract.

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2. The contract must have been breached.  The party in breach of the agreement failed to fulfil their obligations satisfactorily. In order to do this, there must be clear evidence of what the other parties’ obligations were under the agreement, for example, the Terms and Conditions, and proof that those obligations were not performed or not performed well. A chain of emails or text/WhatsApp messages are an excellent record of evidence to show what happened.

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3. You must have suffered loss as a direct consequence of the breach of contract, and have the right to be compensated (awarded ‘damages’) for that loss. However, any of the loss you have suffered must have been a direct consequence of the breach of contract.  The Court will consider the following when deciding on what award you should receive:-

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• Was the loss suffered caused by the breach of contract? In other words, what position would you as the injured party have been in if the breach had not occurred?

• Has there been a mitigation of loss? i.e. has the injured party taken reasonable steps to attempt to reduce or limit the loss they have suffered?

• Is the damage supposedly caused by the breach too remote? This is examined by asking, whether the loss that has been suffered was reasonably foreseeable by both parties at the time the contract was made. This means, is the loss a direct consequence of the breach of contract, that you would have expected to arise if the goods or service was not delivered to standard? Assessing losses is not s straight forward exercise and can become quite complex.

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What are the legal remedies for breach of contract?

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You may be entitled to receive monetary damages for the breach of contract.

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The general intention of awarding damages is to place the injured party in the same position they would have been in had the contract been performed as expected and agreed.

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Other alternative remedies includes an order for an injunction where the party in breach must either remedy the breach of contract or refrain from causing further damage. Or the Court could make an order for specific performance which means the party in breach must fulfil a particular term of the contract which they previously failed to do.

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We have acted for various commercial concerns in breach of contract cases, some of which have settled well prior and during litigation, others have resulted in a full trial becoming expensive and in some instances disproportionate to the value of the claims.

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