Contract Advice

Some contracts will contain provisions which dictate what is to happen in the event of a breach. If no such provisions exist there are a number of remedies available to the aggrieved party. Some of these are ‘self help’ remedies which allow the wronged party to take matters into their own hands. Self help remedies include:

• Withholding performance of your end of the bargain, for instance by withholding payment for defective or incomplete performance.
• Walking away from the contract – ‘rescission’. Under this remedy, the wronged party refuses to perform any future obligations which may be due under the contract. A note of caution – before rescission will be allowed, the breach in question must be ‘material’ – that is to say it must be sufficiently serious to warrant bringing the contract to an end. Walking away without justification can leave the aggrieved party in breach of contract.

If the contract dispute proceeds to court, there are a number of remedies the courts can award. The most common breach is a failure to pay monies due under the contract. As such, the most common judicial remedy is an order to pay the sum due. If it is performance of the contract that is sought, the court can make an order compelling the contract breaker to perform their half of the bargain. This remedy is only available when performance is possible and the order is not unfair on the breaching party or out of proportion to the breach.

A party will not be compelled to perform their half of the bargain when personal relationships are involved, nor will the court make an order to perform a contract if the subject matter is of no particular significance e.g. it is a contract involving goods which can be readily purchased elsewhere.

An award of damages is one of the most common remedies for breach of contract.