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Summary - Commercial Law IA (cla1501)
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COMMERCIAL LAW CLA1501(Chapter 10: Breach of Contract)
One of the party does not honour the terms/ their performance towards the contract
Refers to specific
NOTE NB: In Law of Contract: obligations/points of performance
in the contract & not contract as a
Party that must perform = “debtor” whole
Party with corresponding right to receive that performance = “creditor”
Reciprocal contracts – contract of sale- both parties are simultaneously obliged to perform and entitled to
performance = both debtor & creditor in respect of different performances. Refer to table on page 113 of
manual
Not all forms of breach of contract can be committed by debtor & creditor:
Can be committed by Can be committed by
Type of Breach
Debtor Creditor
Default of the debtor x
Default of the creditor x
Positive malperformance x
Repudiation
Prevention of performance
Same transaction between parties may create several different rights and duties, hence in context of breach of
contract it’s NB to ascertain which performance obligation gave rise to a ‘problem’ and then determine if it was
the debtor or creditor in respect of that performance who is responsible for the breach.
Purchaser – Pay Performs Seller – Deliver Seller owes item to Seller – to deliver
Debtor payment Creditor Purchaser becomes Debtor to
Purchaser who is
now seen as
Creditor at this point
BREACH OF CONTRACT; 5 DIFFERENT WAYS in contract.
1) DEFAULT OF DEBTOR
Default of Debtor = they fail to perform on time and the delay is their fault
2 Requirements for default by debtor to occur:
Pertains to time only and no other aspects of contract
Debtor in mora if not performed on date/time agreed then letter of demand
issued to allows debtor to perform in new reasonable time frame. If
performance still late then = debtor default = mora ex persona
1. Performance must
Reasonable time dependant on contract & circumstances, court takes
be late
following into consideration
Parties’ intention
Nature of performance due
Difficulties/delays experienced by the parties at conclusion of the
contract
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