3PB Direct

Our barristers have significant and wide ranging experience of breach of contract issues. Typical breach of contract claims are:

  • Failure to provide services either in full, to agreed standard or on time;
  • Defective work or goods;
  • Non-payment for goods or services; and
  • Breach of restrictive covenants (typically in employment contracts) or warranties in business sale transactions.

It is a feature of many contract disputes that there will be a claim that the written contract does not deal with all the agreed terms or that what was agreed in writing was varied thereafter. In this context, it is important to recognise the difference between business to business contracts and business to consumer contracts and to bear in mind that the law does in some circumstances allow terms to be implied into contracts (and especially employment contracts).

With contracts between business and consumers there are some statutes which specifically imply terms into such contracts, regardless of what a written contract provides, in order to protect consumers. Statutes which any business dealing with consumers need to know about are the Supply of Goods and Services Act 1982  and the Sale & Supply of Goods to Consumers Regulations 2002 and the Unfair Contract Terms Act.

With contract disputes between two businesses the courts are generally far more reluctant to imply terms, for the simple reason that businesses are expected to be in a better position to negotiate, may well have taken legal advice before finalising the contract and partly as a matter of legal policy. The law may imply terms if necessary to create good business practices or where the parties have acted in a way which has clearly indicated a change to the terms originally agreed. Another way in which terms may be implied by law is where a contract is silent or unclear on certain issues, whether there are clear standards relating to that issue found in similar contracts within the industry, sector or type of business dealing in question, like construction contracts where there are clearly defined industry standards for certain contractual issues.

A very common mistake is to assume that, having a contract in writing is the whole story and that, if the other party does not stick to the written contract, you will almost certainly succeed with a  breach of contract claim. Contracts get varied in any number of ways – such as where the parties do not stick to the terms, by subsequent conversations or communications by email, or by a course of dealings inconsistent with the original terms or waiver of a breach. It is common for a defendant to a breach of contract claim to raise an allegation that the contract was varied and all too easy to say there was a verbal conversation to change the terms. At the very least, this can cause delay and mean it will be very difficult, for example to get a summary judgment from the court, since evidence of an alleged verbal variation would have to be tested by cross examination at trial.

The key issue to understand is that most breaches do not give the right to immediately terminate. Typically only a fundamental or repudiatory  breach will allow the innocent party to cancel the contract. Some contracts make very clear what breaches constitute acts which give the other party the right to terminate. With other breaches of contract, it is generally necessary to allow the party in breach an opportunity to correct, or remedy the breach. Failure to give the party in breach the opportunity to remedy the breach may result in the initially innocent party then being in breach with severe consequences.

Often contracts also includes restrictions on liability or attempts to completely exclude liability. The interpretation and effect of such clauses tends to be very different if the contract is between a business and consumer as opposed to business to business. Get in touch with our breach of contract barristers for further advice, information or a steer on your legal position.

If you are considering taking court action due to a breach of contract the legal costs should be weighed against the amount likely to be received in damages.

For help and advice please contact David Fielder on +44 (0)3333 231 586 or email us.

Frequently asked questions

It is always important to have the right contract in place for any transaction. No matter how good the relationship between the parties or the preparation of the paperwork, you simply cannot stop the other party breaching the contract. A “contract” does not have to be a written document in order for it to be […]

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In some situations, where there is a longstanding or otherwise fruitful relationship of value or where the innocent party has other business reasons for being unhappy with the contract, it may be possible to use the breach as a tool for generally renegotiating the terms of the contract in a more advantageous way. This can […]

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If a condition of your contract has been breached, you may be able to terminate the contract by ‘repudiation’ and claim compensation for the loss you have suffered. If the breach of contract is a breach of a warranty, compensation is by damages alone. Damages are used to put the claimant back in the position […]

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The breaches in contract normally fall into any of four categories: minor, material, fundamental (repudiatory), and anticipatory. A minor (or partial) breach of contract is where, for example, a builder substitutes a part (specified within the contract) for a different part that may work just as well. A material breach of contract is where the […]

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In a contractual situation, English law provides that the innocent party does have a duty to take reasonable steps to minimise loss. The burden of proof is on the defendant to prove that the innocent Claimant has failed to mitigate loss. This duty to mitigate’ means losses cannot be recovered if they could have been […]

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There is a six-year limitation period for bringing a breach of contract claim. Another aspect of responding to a breach of contract by the other party is to be careful not to waive the breach. This can occur by delay or other conduct and may result in a finding by a court that rights to […]

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Yes the court has discretion, in addition to making orders for damages, to order an injunction – so that the party in breach must take steps to remedy it or refrain from causing further damage – such as a breach of a restrictive covenant in an employment contract.

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Yes. A less common option for breach of contract is ‘specific performance’, in which you can obtain a court order for the other side to carry out their contractual obligations. Such orders are sought in the unusual situation where parties exchange contracts for a property but for whatever reason the seller fails or refuses to […]

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No, there is no concept of ‘punitive’ damages in the UK, so compensation will be the actual loss you have incurred.    There are two types of damages in the UK : Special damages are awarded for quantifiable losses, such as loss of profits. General damages are awarded for unquantifiable losses, such as physical inconvenience […]

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