Week 9 - Breach of Contract and Remedies Flashcards
(14 cards)
Breach of contract definition
When one party fails to perform wholly or substantially their obligation under the contract.
Two types of a contract breach
- Actual breach
- Anticipatory breach
Definition of an actual breach
Breach occurs on the due date of performance
Definition of anticipatory breach
Before the due date of performance, the party makes it clear that they won’t fulfil the contract.
Name the 2 options for anticipatory breach
- Treat contract as over
- Sue for damages without waiting for due date of performance
Name 2 remedies the innocent party to a breached contract is entitled to
- Damages
- Specific performance
- Quantum Meruit Payment
- Injunction
- Recission
What are damages?
Monetary compensation for loss suffered and/or benefits which would’ve accrued from the contract.
How are damages measured?
The award of damages are compensatory.
What are liquidated damages?
Parties can stipulate (demand) damages payable to them upon the breach occuring.
What’s the mitigation of loss?
The innocent party in a contract is required to mitigate his losses.
When can damages for non-financial losses be recovered?
If the contract is designed to give pleasure or enjoyment.
What is Quantum Meruit Payment?
“For as much as he deserves”
Proportional payment for performance already carried out under a contract.
Applies where
- Complete performance was hindered by act of other party
- Amount payable wasn’t stipulated by the parties.
What’s specific performance?
Usually prohibitive and is an order to not do anything contrary to the contract.
What’s recission?
The contract is set aside like it never existed.
Courts will seek to return the parties to the condition they were in as if the contract never existed.
