In simple terms this means a party has not fulfilled one or more of its obligations under the terms of the contract. However, careful attention must be given to the nature of the breach.
Contractual Disputes
A contract can be verbal, written, or implied by the conduct of the parties involved. While it is always sweet and hunky-dory at the time two or more parties enter in a contract for provision of services, disputes can emerge in the course of performing the contract. Well begun is half done!
It is very common to see disputes arising from breach of contracts between businesses and personal interactions. When faced with a contractual dispute three fundamental issues arise: the types of breach, the extent of losses or damages and the remedies available for the innocent party. These disputes encompass a wide array of issues, ranging from non-payment to the delivery of substandard goods or services, the validity of contracts, unfair terms, and the interpretation of contract clauses. A party who intends to bring a claim for breach of contract seek advice on the merits, quantum of losses/damages and limitation period.
RKM Law specialises in advising on contractual disputes, providing guidance to protect your rights and pursue appropriate remedies. The scope of our service starts from advising on the merit of your claim, negotiating for a favourable outcome and issuing a claim in the court of England and Wales or in the relevant jurisdiction.
Types of Contractual Disputes
Breach of Contract
Material Breach : A substantial failure to adhere to its obligation by one party thatweakens the main purpose of the contract.
Minor Breach : A partial or insignificant failure that does not compromise the overall contract but certainly not in favour of the innocent party.
Anticipatory Breach : This is where a party notify the other party of their inability to fulfil future obligations for specific reasons.
Misrepresentation
When a party has provided an untrue statement, on which the other party relied upon, before entering into a contract. A claim for misrepresentation can be brought in respect of misrepresentation of fact or law. The extent of the misrepresentation must also be ascertained. There are broadly three types of misrepresentation:
Fraudulent : Where one party intentionally deceive the other party.
Negligent : Where one party carelessly provide untrue information.
Innocent : Where one party has mistakenly or unintentionally provided information which turned out to be untrue.
Undue Influence and Duress
Undue Influence : In some circumstances one party may exploit power dynamics to influence the other party to enter into a contract.
Duress : This is where one party apply duress or coerces the other through threats or pressure to enter into a contract.
Undue Influence : In some circumstances one party may exploit power dynamics to influence the other party to enter into a contract.
Mistake
A mistake in a contract can make it void or voidable. This can occur when:
Mutual Mistake : Both parties of a contract share an incorrect belief or understanding which weakens the purpose of the contract.
Unilateral Mistake : One party is mistaken but the other is aware.
Contractual Terms Disputes
Contracts are usually drafted by lawyers who try to set out relevant clauses to govern the relationships of the parties. However, it is impossible to cover all possible scenarios and hence parties may disagree with the interpretation or application of specific terms leading to disputes. A contract consists of terms explicitly stated (Express Terms) and others which are inferred or assumed (Implied Terms).
Non-Payment and Debt Recovery
Non-payment is probably the most common when one party fails to pay for goods or services provided. This includes, but not limited to,
- Unsettled bills for goods or services.
- Failure to repay borrowed funds.
- Failure to pay for additional services/products.
Remedies Available
An innocent party in a breach of contract claim have recourse to several remedies subject to the nature of the breach and evidence.
Damages
Mostly parties will seek damages as this remedy is intended to compensate them for any losses suffered due to the breach. Damages are categorised as follows:
- Compensatory Damages
- Consequential Damages
- Liquidated Damages
- Nominal Damages
- Punitive Damages
Specific Performance
This is an equitable remedy that forces the breaching party to fulfil its obligations. This remedy is mostly appropriate when damages is not sufficient to remedy the breach. This remedy does not apply for certain types of contracts.
Injunction
This is an equitable remedy and further classed as prohibitory injunction or mandatory injunction. A party may obtain an injunction from the court to either prohibit the other party from doing something or obligate that party to do something. This remedy is appropriate to prevent ongoing or imminent breaches of contract.
Rescission
In cases of material breach or misrepresentation that adversely affect the main purpose of the contract, the parties can cancel or terminate the contract in view of restoring their positions as if there was not any contract in force.
Restitution
Where a breaching party has received either property or money under the contract, he has an obligation to return all to the rightful owner in order that he should not be unjustly enriched or retain an unjustified advantage at the expense of the injured party. This remedy is often sought in conjunction with rescission.
Quantum Meruit
This remedy is often referred as ‘the amount he deserves’ or “as much as he has earned”. Quantum Meruit is relevant where a party unreasonably refuse to pay for services rendered or where the parties have not agreed a valid contract covering the work to be performed or the contract does not have an agreed sum for payment, or one party has undertaken additional work which was not expressly stipulated in the contract but deemed necessary.
Our Services
Consultation : Advice on merits of your claim as well as explaining your legal rights, courses of action and remedies.
Negotiation and Mediation : Negotiation and mediation has surged over the last decades and are deemed to be the least costly route to resolving legal disputes.
Litigation and Court Representation : Our litigation team will assist you from day one until trial or settlement including representation in court and aim for a favourable outcome.
Contract Drafting and Review : It is crucial to draft or review your contract meticulously to prevent future disputes. In some cases, negotiation and mediation can warrant redrafting of the contracts for a better relationship.