Contracts

Contracts

PERFORMANCE OF CONTRACTS

A party must perform exactly what he or she undertook to do in the contract; this rule may be modified in a number of ways, including:

1. Substantial performance.

2.Voluntary acceptance of partial performance.

3. Breach of terms relating to time.

4. Vicarious performance.

TERMINATION OF CONTRACTS

Contracts may be void from the outset or become void or voidable for a number of reasons, including mistake, misrepresentation, lack of capacity, duress, frustration, fraud and illegality. In some circumstances contracts are terminated as a result of breach; there are three basic types of breach.

Anticipatory breach

Lawful excuse

Actual breach

When it becomes clear to one party that the other does not intend to fulfil his or her part of the contract.

The reason for breach is regarded as sufficient to justify non-performance of contractual obligations.

One party has in fact performed the contract defectively, or in a manner different from that agreed in the contract, or not at all.

REMEDIES

The innocent party may choose to discharge the contrac

The usual remedy for breach of contract is damages, although injunctions and specific performance are available in certain circumstances.Damages Limitations on awards of damages There are three ways in which the recovery of damages is limited: causation, remoteness, and Mitigation. lassification of damages Damages may be classified in a number of ways, for example:

substantial damages, nominal damages, liquidated damages, unliquidated damages, general damages, special damages, exemplary damages, and aggravated damages.Injunctions An injunction is a type of court order that either prohibits a party from doing or continuing to do a particular thing or orders that party to carry out a certain act.

There are two main circumstances in which the innocent party may choose to discharge the contract:1. Repudiation. One party makes it clear that they no longer intend to be bound by the contract.

2.Breach of a fundamental term of the contract.

Specific performanceIt is a court order, which compels a party to perform their obligations under a contract. It is only granted where damages alone would not constitute adequate compensation. Specific performance is mainly applied in contracts to sell land.

Agreed remediesIn order to ensure some predictability in contractual relations many commercial contracts specify the kinds of breach that will justify termination and stipulate the levels of damages to be paid in the event of certain types of breach.

Reference Haigh, R. (2009). Legal English. Cavendish. USA: New York.

When considering an application for a mandatory injunction, the court applies a balance of convenience test, and may refuse to grant the injunction if the defendant would lose a lot more by restoring the original position than the claimant would gain.

Vicarious performance occurs where the contractual obligations of one of the parties are performed, upon that party’s request, by a third party. The other party cannot object to vicarious performance unless (1) it prejudices their interests, or (2) the service contracted for is one that relies on the skill and judgement of the party contracted to provide the service, or (3) the contract stipulates that the obligations must be performed personally.