Breach of Contract and Legal Remedies for Breach of Contract

• Author: Carolyn MacLean/Alex Colangelo
• Pages: 313-332

313

Introduction ........................... 314

Method of Breach ...................... 314

Nature of Breach ....................... 316

Remedies .............................. 318

Damages .......................... 319

Specific Performance ................. 323

Injunctions ......................... 325

Rescission .......................... 327

Restitution ......................... 328

Discharge ......................... 328

Quantum Meruit .................... 329

Substantial Performance ............... 330

Chapter Summary ...................... 331

Key Terms ............................. 331

Review Questions ...................... 331

Exercises .............................. 332

Learning Outcomes

After completing this chapter, you should be able to:

• Define breach of contract.

• Distinguish between the repudiation of a contract

and an anticipatory breach.

• Explain the difference between a contract condition

and a warranty, and the difference between a breach

of condition and a fundamental breach.

• List and explain at least four different types of

remedies available in the wake of a breach of

contract.

• Describe the circumstances in which a court might

order the remedy of specific performance.

• Describe the remedies that courts can use to

compensate a party for partial completion of contract

obligations.

Breach of Contract and

Legal Remedies for

Breach of Contract

17

© [2023] Emond Montgomery Publications. All Rights Reserved.

314 PART II CONTRACT LAW

Introduction

This chapter discusses the actions and non-actions that constitute breach of contract

and the remedies that are available to the injured party.

Breach of contract occurs when one party to a contract fails or refuses to fulfill

their obligations under the contract without legal excuse. However, different types of

breaches have different consequences. The method of the breach must first be estab-

lished, and then the nature or seriousness of the breach must be examined, after

which the remedies available to the injured party are determined. For example, the

injured party may be able to claim compensation for damages suffered as a result of

the breach; declare that the contract has been discharged, thereby releasing the

injured party from their obligations; compel the party in breach to perform the obliga-

tions; or apply a combination of these remedies.

Method of Breach

A party to a contract may repudiate the contract, thereby breaching it (see Figure17.1).

The most common form of repudiation, known as “express repudiation” or “express

breach,” is failing or refusing to perform the obligations created by the contract when

they become due. The repudiation must be clear, unambiguous, and explicit for the

other party to be able to rely on it. It may take the form of an actual declaration of

refusal or simply be a failure to perform.

Breach Implied repudiationAnticipatory breach

Express repudiation or express breach

Implied repudiation that is certain

FIGURE 17.1 Breaches of Contract

Example of Express Repudiation or Express Breach

Sian promises to deliver a load of gravel to Northwest Contracting Limited on a

certain day but fails to do so. On the agreed-upon day of delivery, Sian telephones

Northwest Contracting and states that he cannot deliver the gravel as promised.

If the repudiation occurs before the date of performance, it is an anticipatory

breach. Again, the repudiation must be clear, unambiguous, and explicit.

Example of Anticipatory Breach

Sian promises to deliver a load of gravel to Northwest Contracting Limited on a

certain day. Before that day, he discovers that the company that supplies his

breach of contract

failure, without legal excuse,

to perform any promise that

forms part of a contract

repudiate

to reject or disown as having

no force or authority

express repudiation/

express breach

the failure or refusal to

perform the obligations

of a contract when

they become due

anticipatory breach

an express repudiation that

occurs before the time of

performance of a contract

© [2023] Emond Montgomery Publications. All Rights Reserved.