Micro Brewery Industry Evaluation
LAW OF CONTRACT
2007-08
Topic 6 – BREACH OF CONTRACT
This final topic considers the different consequences of breaching a contract and also the parties who may enforce a contract.
Learning Objectives
• Students should be able to determine when an innocent party will be entitled to terminate the contract as a result of a breach and how they may loose that right • Students should understand what is meant by anticipatory breach • Students should learn the purpose of an award of damages in contract law (as opposed to the law of tort) • Students should be able to quantify the different categories of loss • Students should understand the restrictions on the availability of damages • Students should understand the implications of the doctrine of Privity of Contract • Students should be able to identify the actions available to a “third party” • Students should understand the rational for the exceptions to the doctrine
Part I. BREACH
“Breach” = a failure to perform contractual obligations where there is no lawful excuse.
Lawful Excuse
Conditions Precedent = If A has to perform before B becomes liable, the performance by A is a condition precedent to B’s liability (Re Application of Butler [1970] IR 45).
A breach does not of itself bring the contract to an end. It may give the innocent party the right to terminate the contract, if the innocent party elects to do so.
While every breach will give rise to a remedy in damages, not every breach generates a right to terminate further performance of the contract.
A. Right to Terminate for Breach
1. Where the term not fulfilled is a condition or in certain cases an innominate term
2. Termination Clause
3. Repudiation
If non-performance indicates an intention no longer to be bound by the contract, the other party may treat himself as discharged. If the innocent party accepts the repudiation, all his future obligations come to an end as
2007-08
Topic 6 – BREACH OF CONTRACT
This final topic considers the different consequences of breaching a contract and also the parties who may enforce a contract.
Learning Objectives
• Students should be able to determine when an innocent party will be entitled to terminate the contract as a result of a breach and how they may loose that right • Students should understand what is meant by anticipatory breach • Students should learn the purpose of an award of damages in contract law (as opposed to the law of tort) • Students should be able to quantify the different categories of loss • Students should understand the restrictions on the availability of damages • Students should understand the implications of the doctrine of Privity of Contract • Students should be able to identify the actions available to a “third party” • Students should understand the rational for the exceptions to the doctrine
Part I. BREACH
“Breach” = a failure to perform contractual obligations where there is no lawful excuse.
Lawful Excuse
Conditions Precedent = If A has to perform before B becomes liable, the performance by A is a condition precedent to B’s liability (Re Application of Butler [1970] IR 45).
A breach does not of itself bring the contract to an end. It may give the innocent party the right to terminate the contract, if the innocent party elects to do so.
While every breach will give rise to a remedy in damages, not every breach generates a right to terminate further performance of the contract.
A. Right to Terminate for Breach
1. Where the term not fulfilled is a condition or in certain cases an innominate term
2. Termination Clause
3. Repudiation
If non-performance indicates an intention no longer to be bound by the contract, the other party may treat himself as discharged. If the innocent party accepts the repudiation, all his future obligations come to an end as