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Contract law Summary of Contract Remedies
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This is a comprehensive and detailed summary on contractual remedies. Essential!!
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Eliza ParrSummary of Remedies
Breach of Contract and Termination
Contracts may be brought to an end in a number of ways:
(i) Full performance
(ii) Mutual agreement
(iii) Operation of a term in the contract
(iv) Operation of the law
(v) One party’s termination for another party’s breach
(vi) Failure to perform one or more contractual obligations (breach)
Breach of contract occurs when a party refuses or fails to perform any of his contractual obligations,
performs them defectively, or incapacitates himself from performance.
Breach does not automatically bring a contract to an end. It will always result in a right to claim
damages, and possibly specific performance, but not always termination.
A claimant can only terminate the contract in certain situations:
(i) If the breach relates to all of the obligations of the contract breaker
(ii) If the breach is of a ‘condition’ (an essential term)
(iii) If the breach is of a ‘warranty’ (a subsidiary term) then termination is not allowed, there is
only a right to damages
(iv) If the breach is of an ‘innominate term’ (a ‘wait and see’ term) termination will only be
allowed if the claimant is thereby deprived of substantially the whole benefit that was
intended to be received under the contract.
An anticipatory breach occurs where renunciation/impossibility occur before performance is due.
The claimant is entitled to immediate damages (Hochster v De La Tour) and may be entitled to
terminate if the breach is sufficiently serious.
A party is permitted to withhold his own performance (without terminating the contact for breach)
simply because his own performance is not yet due because:
i. A contingent condition has not occurred
ii. His own performance is dependent on the other party’s entire performance of a
certain condition
Contractual terms are classified according to statute, the express agreement of the parties, binding
precedent or judicial determination of the parties’ implied terms
A term is likely to be a condition if:
i. It involves a single performance, clearly specified in time and sequence
ii. It can only be breached in one way
iii. It is vital to the contract
iv. It is necessary for commercial certainty
A term is likely to be innominate if:
i. It can be breached in different ways with varying degrees of seriousness
ii. Where performance takes place over some time and substantial performance may
already have been given
iii. Where the obligation is loosely framed
An election to terminate must be clear, unequivocal and communicated to the contract-breaker. No
reason for termination need be given, as long as the claimant is legally entitled to terminate.
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