How a contract can be breached
There are two main ways a A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. can breach a An agreement that the law will enforce.:
- where a party fails to actually do what a clause states must be done by the time agreed, or if no time is provided, within a reasonable time; and
- where a party’s conduct manifests an unwillingness or inability to perform the contract; if this occurs before the performance is due, it is considered to be an anticipatory breach.
For example, A is required to deliver a container of goods within seven days of signing a contract with B. If, a couple of days before the delivery (i.e. the performance) is due, A tells B that he has run out of those goods and A document that sets out what a person wants to happen to their money and other property after they die. not be able to deliver them within the seven-day period, A is in anticipatory breach of the contract. Once the delivery is due, A is in actual breach of the contract.
Remedies for breach of contract
There are three main remedies for breach of contract Failing to do what was agreed in a contract. that you can obtain from a An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate.:
- A court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages.: A breach of contract – whether it is a breach of a condition, or an intermediate term, or a A promise in a contract. For example, a promise by a manufacturer that goods will be repaired or replaced if they turn out to be faulty. – entitles the wronged party to damages, regardless of whether or not the breach has caused loss. If no loss can be proven, the wronged party is still entitled to ‘nominal damages’ (recent Law based on the reasons judges have given for their decisions in court cases, and which judges in later, similar cases are bound to follow. Under the doctrine of precedent, lower courts, such as the Magistrates’ Court of Victoria, are bound to follow relevant decisions of higher courts, such as the Supreme Court of Victoria. Case law is also called ‘common law’ and ‘judge-made law’. suggests this is approximately $100).
- Carrying out the precise obligations that are set out in a contract. For example, a contract might require the sale of a piece of land. If the parties do not perform a contract a court can order specific performance.: A wronged party can seek orders from a court compelling the party who breached the contract to perform the contract. For example, if A is in breach of a contract by failing to attend settlement to transfer land to B, B can seek a court order forcing A to attend settlement and transfer the land to B.
- The end of something. Contracts terminate when the parties have done what they agreed. A contract can also be terminated without being completed, for example if one party breaks the contract, or it is impossible to carry out.: A breach may entitle the wronged party to terminate the contract in the following circumstances:
– where the contract provides a right to terminate in the case of such a breach;
– where the breach constitutes ‘repudiation’, which is when a party shows an intention to no longer be bound by the contract, or to only perform it in a matter that is substantially inconsistent with their obligations;
– where a party breaches a condition and fails to perform an obligation that is considered an essential term of the contract;
– where a party breaches an intermediate term and fails to perform an obligation that causes substantial loss of benefit to the wronged party.
For more information about what you can do if you are seeking a remedy for a breach of contract, see Chapter 7.4: Taking action as a Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use.. For information about loan contracts, see Chapter 5.9: A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. reporting.