breach and termination

Question 1

What are the two main remedies in contract law?

Answer 1

Judicial and self-help remedies.

Question 2

What is judicial remedy?

Answer 2

Going to court to seek judicial assistance or compel payment or performance or damages.

Question 3

What is self-help remedy?

Answer 3

Exercisable without the assistance or sanction of a court, to preserve or enforce rights under the contract.

Question 4

What are the two possibilities in contract law?

Answer 4

Retention and rescission.

Question 5

What is retention in contract law?

Answer 5

Withholding performance until the contract breaker repairs their breach.

Question 6

What is rescission in contract law?

Answer 6

Termination of the contract altogether regarding post-termination performance.

Question 7

What options does an innocent party have when faced with a breach?

Answer 7

An innocent party may do nothing at all; they are not obliged to ask the guilty party to cure the breach.

Question 8

What is a non-material breach?

Answer 8

A breach that gives the right to damages only.

Question 9

What is a material breach?

Answer 9

A breach that gives the right to rescind the contract (optional).

Question 10

How does a court determine if a breach is material?

Answer 10

The court looks at the nature and consequences of the breach and the nature of the contract term that was broken.

Question 11

What is the significance of the case Wade v Waldon?

Answer 11

It illustrates that a failure to provide advertisements was not a material breach, and rescinding the contract was improper.

Question 12

What does repudiation involve?

Answer 12

Breach by the guilty party and acceptance of that breach by the innocent party.

Question 13

What is the effect of rescission?

Answer 13

It terminates the innocent party’s future obligations under the contract.

Question 14

What is the ultimatum procedure?

Answer 14

A notice served to the party in breach, giving them time to perform before treating the breach as material.

Question 15

What is anticipatory breach?

Answer 15

When the date for performance has not yet arrived, but a party indicates they will breach when the date arrives.

Question 16

What was the outcome of Lindley Catering Investments Ltd v Hibernian Football Club?

Answer 16

The judge suggested that Hibs should have given the catering company a chance to cure the breach.

Question 17

What is restitution following breach of contract?

Answer 17

Giving something back when goods or money have been transferred and the contract is rescinded.

Question 18

What was held in Stork Technical Services (RBG) Ltd v Marion Howitson Ross?

Answer 18

The defender’s failure to provide an enforceable decision constituted a material breach of contract.

Question 19

What does Steel v Young illustrate?

Answer 19

A building contractor who fails to follow plans is not entitled to sue for the contract price.

Question 20

What is mutuality in contract law?

Answer 20

The idea that both parties have rights and obligations under a bilateral contract.

Question 21

What is retention or withholding of performance?

Answer 21

The right of a party to withhold performance in response to a breach by the other party.

Question 22

What is the significance of Inveresk plc v Tullis Russell Papermakers Ltd?

Answer 22

It established that retention can operate across multiple contracts if they are part of the same transaction.

Question 23

What is the criterion for retention in contract law?

Answer 23

The obligation breached and the obligation retained must be counterparts of one another.

Question 24

What does the case Bank of East Asia v Scottish Enterprise confirm?

Answer 24

The requirement of interdependence in retention was confirmed, allowing retention for breaches up to a certain date.

Question 25

What was the outcome of McNeill v Aberdeen City Council (No 2)?

Answer 25

The employee's breach did not prevent him from making a claim for the employer's breach.

Question 26

What is the second criterion for retention?

Answer 26

The breach must be material.

Question 27

What is a trivial breach?

Answer 27

A breach that does not warrant a remedy but may lead to nominal damages.

Question 28

What are the remedies available for a non-trivial, non-material breach?

Answer 28

Remedies are available.

Question 29

What justifies non-performance in a contract?

Answer 29

Retention justifies non-performance by not misperformance. ## Footnote Lord Drummond Young

Question 30

What is the criterion for a material breach?

Answer 30

The breach must be 'material', which is used in a different sense than elsewhere in breach of contracts.

Question 31

What is a material breach?

Answer 31

A material breach allows you to rescind the contract.

Question 32

What is a trivial or trifling breach?

Answer 32

A trivial or trifling breach has no remedy but could potentially result in nominal damages, which is very rare.

Question 33

What is a non-trivial, non-material breach?

Answer 33

A non-trivial, non-material breach allows for remedies and damages but not rescission; retention is available.

Question 34

How must retention be used?

Answer 34

Retention must not be used in an abusive or unfair manner.

Question 35

Can retention be used in employment contracts?

Answer 35

It is difficult to use retention in employment contracts.

Question 36

When can you retain for a breach?

Answer 36

You can only retain for a breach that happened in the past.

Question 37

What is the court's concern regarding retention?

Answer 37

The court is concerned to ensure that the right to retain is not abused.

Question 38

What is an example of abuse of retention?

Answer 38

Where A is retaining performance simply to delay having to perform her obligations.

Question 39

What must obligations be in relation to retention?

Answer 39

Obligations must be contemporaneous; you can only retain if you respond to a breach.

Question 40

When must the breach occur for retention to apply?

Answer 40

The breach must happen before your obligation was due to happen.