If you’ve ever been unfortunate enough to get involved in a dispute over a business contract, you’ll know that they can be horribly complicated and have a habit of becoming incredibly expensive to resolve.
The problem with contractual disputes is that unless the situation is dealt with quickly and effectively costs can spiral out of control. In situations like these there’s no point burying your head in the sand, hoping the conflict will resolve itself: it’s far better to tackle the problem head on. If that’s your preferred method, then you’re going to need legal advice.
Harold Stock & Co Solicitors has considerable experience in dealing with contract disputes and can offer expert and personable advice.
We’ll try to resolve the dispute amicably either by mediation or by correspondence in an effort to reach a compromise or see an end to the dispute early. It is hoped that this will avoid unnecessary legal action, but if that option isn’t available our solicitors will help you establish whether there has been a breach of contract, whether any breaches have caused recoverable losses, quantify any losses and offer advice upon the legal remedies/defences which may be available to you.
If you’re not sure whether your current dispute constitutes a breach of contract or is just a storm in a teacup, then have a look at the following information we’ve collated for you.
What is a breach of contract?
A breach of contract occurs when one or more of the terms and conditions laid out in a contract has been broken. Such a breach could lead to the contract breaking down completely and could easily result in legal action and a claim for damages in a law court. Most contracts are formed when an agreement is made between two or more parties to carry out a service or the provision of goods in return for payment for that service or goods. If one of the parties fails to carry out their side of the agreement, then they can be said to be in breach of contract. Breach of contract, however, can also occur if any agreed work carried out or goods provided is/are defective, or if one party makes the other aware that they will not be carrying out the agreed work or providing the said goods. Breaches of contract can also include non-payment for a service or not paying on time, failure to deliver services or goods, and being late with services without a reasonable excuse. Terms and conditions are a fundamental part of a legally binding contract and any broken terms can lead to breach of contract.
What types of Breach of Contract are there and are they all fatal?
The main types of breach of contract will be minor, material, fundamental, and anticipatory. Minor breaches are rarely fatal. A material breach, on the other hand, will generally be a breach that will have serious consequences on the outcome of the contract. A fundamental breach would be one so serious that the contract has to be terminated. An anticipatory breach is one where one of the parties makes it known that they will not be carrying out all of the agreed work, or providing the goods ordered and the consequences can be termination of the contract and damages being sought in court.
Proof of breach:
If a dispute does occur due to breach of contract then the judge will need to decide that a legally binding contract exists, and that it has been breached. In some cases the contract may only be a verbal contract and there may be no actual written evidence that a contract was formed. However, in such cases a judge will need to study the terms and conditions of the contract in detail, and then clarify what actually was agreed in practice.
Recoverable loss:
Damages can be awarded to an innocent party if a law court upholds that a contract has been breached. Damages will be used to compensate the innocent party for their loss caused by the breach. These damages are usually a remuneration that will reflect the loss. Damages can even be awarded when there has been no actual loss, though the innocent party will generally only be awarded nominal damages.
An entitlement to damages may be awarded if the innocent party can prove that a breach of contract took place. The innocent party must first prove that there was a loss due to the breach, and then prove that the nature of the loss would lead to compensation. Remoteness of loss will also be taken into consideration by the courts and may include future loss that could reasonably occur from the contract being broken.
Other losses can include loss of profits, the cost of rectifying the breach and wasted expenditure. If disputes do end up in the law courts then the amount awarded may depend on how much documented proof the claimant has regarding financial loss. This can include actual records and documentary proof of financial loss due to the breach.However, even if there is little proof damages can still be awarded: the judge will ascertain all of the facts of the case from the evidence presented.
Breaching a contract can be a serious offence and is one of the most common offences to come before the courts. Anyone considering court action for breach of contract should seek expert legal advice before proceeding. Court disputes are a lengthy and costly procedure and the legal costs should be weighed up against the likely damages awarded.
For further information about breaches of contract or contract disputes and resolution, call Harold Stock & Co Solicitors on 01457 835597 or email info@haroldstock.com.
