This chapter discusses the law on performance and breach of contact. It covers the order of performance; excuses for non-performance; whether a party who does not perform perfectly can claim payment or performance from the other party; whether an innocent party who has paid in advance can recover his payment in the event of a failure of perfect performance; whether the innocent party can terminate the contract; the effect of a repudiation or a fundamental breach; the effect of discharging the contract for a bad reason, when a good reason also exists; contractual provisions for termination; stipulations as to time; and tender of performance.
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18. Performance and Breach
M P Furmston
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One Step (Support) Ltd v Morris-Garner [2019] AC 649; [2018] UKSC 20
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in One Step (Support) Ltd v Morris-Garner [2018] UKSC 20. The document also includes supporting commentary from author Nicola Jackson.
Chapter
Watts & another v Morrow [1991] 1 WLR 1421
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Watts & another v Morrow [1991] 1 WLR 1421. The document also includes supporting commentary from author Nicola Jackson.
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8. Breach and Termination of the Contract
This chapter addresses the breach and termination of the contract. Since the terms represent obligations of the parties, where such an obligation is not followed, we say there has been a breach of the contract. The chapter examines the law relating to breach of contract and how breach can end a contract. When a term is breached, it does not end the contract automatically. Instead, the breach will entitle the innocent party to compensation for losses caused by the breach. In addition, the breach might allow the innocent party to choose to end the contract. Such an option is often determined by the type of term breached or the seriousness of the breach. This means that a typical dispute following an obvious breach will be about whether the innocent party can end the contract. Before one can explore when a breach can result in the contract ending, however, one needs to briefly look at how a party can breach an obligation. That is based on whether the obligation is due to be performed; the type of obligation; and the standard of performance that it requires.
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15. Discharge for Breach
Jack Beatson, Andrew Burrows, and John Cartwright
If one of the parties to a contract breaches an obligation which the contract imposes, that party is in breach of contract. The breach may consist in the non-performance of the relevant obligation, or its performance in a manner or at a time that fails to comply with the requirements of the contract. This chapter sets out the rules governing the discharge of a contract by breach. It shows that the breach may give rise to discharge only if it is sufficiently serious in its effects (a breach which ‘goes to the root of the contract’, or a ‘repudiation’ of the contract) or if it is a breach of a sufficiently serious term of the contract (breach of ‘condition’).
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17. Damages
Jack Beatson, Andrew Burrows, and John Cartwright
This Chapter discusses damages and other remedies for breach of contract. It covers the compensatory nature of damages, basis of assessment of damages, causation, remoteness, mitigation, assessment of damages in contracts for the sale of goods, claimants’ contributory negligence, the tax element in damages, interest, and agreed damages clauses (contrasting penalty clauses).
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21. Remedies for Breach of Contract
M P Furmston
This chapter discusses remedies for breach of contract. It covers damages (remoteness of damage and measure of damages; mitigation; contributory negligence; liquidated damages and penalties; and deposits, part payments, and forfeitures), specific performance (specific performance a discretionary remedy; the principle of mutuality; and the remedy of injunction), and extinction of remedies (the statutory time limits; effect of defendant’s fraud; extension of time in case of disability; effect of acknowledgement or part payment; and effect of lapse of time on equitable claims).
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17. Duress
Duress occurs when B exerts illegitimate pressure upon A to enter into a contract, leaving A with no reasonable practical alternative but to enter into that contract. Duress is founded upon a threat made by B to A, but there is no tort of duress. However, duress will render a contract voidable. This chapter considers the two principal forms of duress. The first is physical act duress, where A’s physical integrity is threatened. The second is economic duress, where A’s economic interests are threatened. Particularly in the context of economic duress, it is important that the threats caused A to enter into the agreement, and that A had no reasonable alternative but to succumb to the threat. As a general rule, any threatened breach of contract can constitute illegitimate pressure. In some instances, even a threat to carry out a lawful act may, perhaps, ground a claim in duress.
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26. Anticipatory breach of contract
This chapter examines the doctrine of anticipatory breach, which occurs where, before the time comes for A to perform their part of the contract, A declares that A is not going to do so. This repudiation of the contractual obligation is itself a breach of contract. The innocent party may choose to either accept or reject an anticipatory breach. If they accept, the contract is terminated and the innocent party can sue for damages immediately. If the anticipatory breach is rejected, then the contract remains on foot. If the innocent party elects not to accept the breach and to keep the contract alive, then they may proceed to perform their side of the bargain and sue for the contract price. However, it appears that this action for the agreed sum, or action in debt, may not succeed if the innocent party had no ‘legitimate interest’ in taking such steps.
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28. Agreed remedies
This chapter focusses on remedies agreed by the parties for breach of contract. Parties may wish to include a term in the contract which dictates what should happen in the event of breach of contract. If the term states that a certain amount of money should be paid upon breach, that term might be valid as a liquidated damages clause or unenforceable as a penalty. If the amount chosen is a genuine pre-estimate of loss, or is ‘commercially justified’, then it is likely to be valid. If the defaulting party had already paid money to the innocent party as a deposit, the innocent party may be able to forfeit that deposit. A term stipulating that specific performance or an injunction will be granted upon breach will not bind the court. However, the court may take into account such a term when deciding whether to exercise its equitable discretion.
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14. Mixed topic questions
The Q&A series offer the best preparation for tackling exam questions. Each book includes typical questions, bullet-pointed answer plans and suggested answers, author commentary, and illustrative diagrams and flowcharts. This chapter presents sample exam questions which cover a mixture of topics. The questions require you to cover a range of material covered in your module. Through a mixture of problem questions and essays, students are guided through a combination of topics that may typically be examined together in an employment law question. Guidance is given on how best to approach mixed questions including the benefits of not viewing topics in isolation and how best to demonstrate the range and depth of knowledge required in a mixed topic question.
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6. Statutory employment protection and related contractual issues
The Q&A series offer the best preparation for tackling exam questions. Each book includes typical questions, bullet-pointed answer plans and suggested answers, author commentary, and illustrative diagrams and flowcharts. This chapter presents sample exam questions about statutory employment protection and related contractual issues. Through a mixture of problem questions and essays, students are guided through some of the key issues on the topic of statutory employment protection including eligibility requirements for the right not to be unfairly dismissed, the right to written reasons for dismissal, statutory minimum notice periods, the right to be accompanied to disciplinary hearings, and the ACAS Code of Practice on Disciplinary and Grievance Procedures. Students are also introduced to the current key debates in the area and provided with suggestions for additional reading for those who want to take things further.
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L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235. The document also includes supporting commentary from author Nicola Jackson.
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White and Carter (Councils) Ltd v McGregor [1962] AC 413
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in White and Carter (Councils) Ltd v McGregor [1962] AC 413. The document also includes supporting commentary from author Nicola Jackson.
Chapter
Farley v Skinner [2001] UKHL 49
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Farley v Skinner [2001] UKHL 49. The document also includes supporting commentary from author Nicola Jackson.
Chapter
12. Breach of contract and termination
This chapter examines breach of contract and the remedy of termination. It discusses: (1) what constitutes breach of contract; (2) the types of breach that will entitle a claimant to elect whether to end (terminate) the contract and sue for damages; namely, conditions and innominate terms the breach of which deprive the claimant of substantially the whole benefit expected under the contract; (3) how terms are classified into conditions, warranties, and innominate terms; (4) the nature and effect of terminating a contract; (5) when the claimant can insist on continuing with performance (affirmation) when the defendant does not want to perform the contract; and (4) the additional special remedies available to consumers in certain cases.
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10. Remedies Part II: Principles That Can Limit the Damages Awarded Following a Breach
This chapter studies the principles that can limit the damages awarded following a breach of contract. It starts with the principle of causation. The idea here is that the breach must have caused the loss. A related issue is the limited application of contributory negligence. Where relevant, damages can be reduced to reflect any fault on the part of the innocent claimant. Both of these factors are of fairly minor importance. The main limiting factor is the principle of remoteness. It is a principle that limits liability to the risks the party in breach appeared to accept. Finally, the chapter looks at the duty to mitigate losses. This requires the innocent party to take reasonable steps to reduce (and not unreasonably increase) the loss suffered after a breach. Depending on the facts, disputes can involve any or all of these limitations.
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5. Consideration and Promissory Estoppel
This chapter evaluates the other requirement for an agreement to be legally enforceable: consideration. In its simplest form, consideration is often described as being something of value that is given (or promised) by each party in exchange for the other party’s promise or performance. Disputes concerning consideration usually begin by one party claiming that the other is in breach of their contract. The other party then argues that no consideration had been given in return for what they promised to do, and therefore the agreement is not enforceable. In a case concerning consideration, courts will typically focus on the obligations to be enforced, and then work out if something of value was given (or promised) in return for the performance of those obligations. Sometimes, a strict application of the consideration requirement is a barrier to reflecting the parties’ intentions. For that reason, the courts have developed a more relaxed approach in certain circumstances. There is also a limited exception to the requirement for consideration, which is known as promissory estoppel.
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9. Remedies Part I: Compensatory Damages Following a Breach
This chapter explores compensatory damages following a breach of contract. Such damages are aimed at compensating the innocent party for any losses it has suffered that were caused by the breach. However, it cannot expect to receive whatever amount of money it demands and it will usually be faced with a dispute about which losses are claimable. For example, lost profits should be claimable, but what about compensation to cover the costs of correcting a breach? Beyond financial losses, is it possible to claim for injured feelings, harm to reputation, or even loss of enjoyment or disappointment? The chapter examines the detailed rules about the types of loss that are claimable. It then looks at how the courts have developed rules for recognizing a wider range of losses. The chapter also addresses the related issue of parties agreeing in advance the amount of damages to be paid following a breach.
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18. Specific Remedies
Jack Beatson, Andrew Burrows, and John Cartwright
This Chapter considers specific remedies for breach of contract. Under certain circumstances, a contractual promise may be enforced directly. This may be by an action for the agreed sum, by an order for specific performance of the obligation, or by an injunction to restrain the breach of a negative stipulation in a contract or to require the defendant to take positive steps to undo a breach of contract. These remedies have different historical roots, the claim for an agreed sum being, like damages, a common law remedy whereas specific performance and injunctions are equitable remedies that were once exclusively administered by the Court of Chancery.
