WHAT TO DO WHEN THERE IS A BREACH OF CONTACT
People enter into contracts in their day-to-day lives when they purchase products, either in person, over the phone, or online, as well as in the course of business. A contract is an agreement between two or more persons that is binding and enforceable by law. Contracts ensure that your interests are protected by law and that both parties fulfil their obligations as promised. For a contract to be valid and enforceable, it must have these key elements: agreement i.e. offer and acceptance, capacity, consideration, and intention to enter legal relation. A written notice must always be used to terminate a contract, the notice should be headed 'Notice to terminate contract'. The notice must include the reason for ending the contract and a reference to a relevant paragraph in the contract. If notice is given to bring the contract to an end in circumstances where it should not have been, the party sending out the notice may face a legal claim for compensation for ending the contract too soon.
Breach of contract occurs, when a party to the contract acts contrary to the terms of contract, it also occurs when a party fails to perform his obligation, either totally or by refusing to perform at all or partially, where one party fails to fulfill or does not intend to fulfill his obligations under the contract. A breach of contract entitles the innocent party to sue for damages against the guilty party, however the methods of breach can have a decisive effect on the right and liabilities of the innocent party, thus, it is important to consider, whether the contract is repudiated, or there is fundamental breach as some breaches entitle the innocent party to sue for damages, and
more serious breaches entitles the innocent party, in addition to damages, to treat himself as discharged from the contract. In general, there are several ways to breach a contract. Some common types of breach of contract actions include:
In addition, some other ways that a contract can be breached include when a contract is fraudulent, is formed illegally, where there is a mutual or unilateral mistake about a material fact in the contract. The parties may also specify certain conditions that will amount to a breach of contract. Also, what is considered breach may also depend on various state contract law provisions and the type of contract.
When a contract is broken, the remedies available to the injured party includes;
Rescission is when a contract is rendered null and void, and so is no longer recognized as legally binding, it is the unwinding of a transaction and is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract. The outcome of rescission is usually that whatever was done by the parties by making the contract is reversed, the contract is treated as "non-existing". Depending on the contract rescinded, court orders may be required to: return money paid over back to the original payer, restore loss of profits arising from transfer of a business, compensate for payment of the cost of the contract and/or out of pocket expenses, restore ownership of property which was transferred under the agreement, take an account of profits for the purpose of rebalancing the parties’ respective positions.
Damages: This is the amount of money awarded to the injured and prevailing party in a lawsuit. These damages are normally paid by the party who caused the injuries and can be imposed as a penalty, restitution, or both. Some types of damages and legal remedies includes:
Quantum meruit: Quantum meruit is a Latin phrase that can essentially be translated as “what one has earned.” It is a legal action in contract law to recover the reasonable value of services performed by one party for another. In other words, a breaching party will be liable to pay for any services completed before a contract was breached. It is a term that can be applied where a party that has provided services wishes to recover a sum of money in return for the services supplied. The
sum may be calculated on a “quantum meruit” basis, i.e. as much as deserved. It is a doctrine that allows one party to recover the reasonable value of goods or services provided to someone else, even in the absence of an express written agreement.
Specific performance is a decree, which is ordered by the court, which directs a
contracting party to perform the contract which he has promised to do. It is an equitable relief and alternative remedy to damages in appropriate cases. It is usually not granted as of right, but granted judiciously by the court. A person claiming specific performance must have legal or equitable interest in the property, where the value of such contract is uncertain or it is difficult to assess the damages. The court will refuse specific performance of a contract which has be obtained by unfair mean.
Injunction is a court order prohibiting a person from taking a particular action (a prohibitory injunction) or requiring them to take a particular action (a mandatory injunction). An injunction is an order by which one party to an agreement is required to do or refrain from doing a particular thing. An injunction is restrictive, preventive or mandatory or compulsive.
In conclusion, what to do when there is a breach of contract is to brief a lawyer and institute an action in court to claim any of the remedies listed above, you must however be able to prove the following;
After both of these initial steps have been completed and if it is possible, you may then file a breach of contract claim with the proper court. Where, when, and how the contract can be filed will depend on the rules of civil procedure, relevant state laws, and the rules of the court in which it is being filed. Although you may be able to learn much of this information by reading the contract and reviewing local legal resources regarding contract disputes, it would be more helpful to consult with a lawyer who will institute an action on your behalf.
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