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Contract Law: Breach of Contract and Remedies Available Case Study


Introduction

A contract as an accord between businesses or individuals who may by mutual consent agree to do something or one may agree to undertake something for a consideration.1 Agreements can oral or written, or even implied depending with the issue at hand.2 In most cases, contracts end up in court claims for failure by one arty to fulfill his part of the bargain, whether in part or full.

For any claim to contractual material breach to be successful, the injured party must establish that: indeed there was a contract; the defendant is indeed the right party to bring a claim, the contract was breached, and the claimant suffered monitory losses.

In a similar case held in 1853,3 it was held that if a party privy to the contract has rendered it difficult to fulfill his part of the contractual bargain, at end of the agreed term that party is directly liable for breach.4 This paper will discuss the relevant facts in Mr. Cosimo and Natural Stone House performance case and advice needed by Mr. Cosimo to pursue the case and Natural Stone House to counter the case.

The legal Issue(s) (Contractual)

Relevant facts to the case

Natural Stone House (“NSH”) under Mr. and Mrs. Alfredo was contracted by Mr. and Mrs. Cosimo to supply and install granite surfaces for the kitchen comprising a bench-top, a servery top and splash-backs July 2013. Mr. Alfredo showed to Mr. Cosimo samples of granite. Ultimately, Mr. Cosimo selected Verde Sorrento granite for the kitchen surfaces. A quotation was made by Mr. Cosimo and handed to Mr. Alfredo on 31 July 2013.

The quotation entailed $5,370 for the bench-tops and about $1,595 for the splash-backs. On 12 August 2013, revised the quotation and offered a single price of about $6,495 which was accepted by Mr. Cosimo. Mr. Cosimo also paid 50 percent of the total cost.

This meant that Mr. Cosimo had seen that the granite bench-tops supplied by Mr. Alfredo were the material he really needed. NSH supplied the material and as agreed and started work on 21st September the same year. However, Mr. Cosimo was not pleased prompting him to cancel the contract.

Issues

Mr. Cosimo is intending to bring the matter to court. He thinks that NSH has breached the contract by delivering bench-top which was not fit for its purpose and of an unacceptable quality. It is also the view of Mr. Cosimo that the materials supplied must befit the work anticipated. It was also anticipated that NSH would raise counter-claims. Using all relevant contractual principles, this paper advises Mr. Cosimo of the strength of his claims as well as the strength of the anticipated counter-claims.

The reason behind the client’s need to obtain advice

There are various reasons clients want to be advised on legal matters particularly contractual claim. In this case, however, main reason why Mr. Cosimo needs legal advice is basically to know how the court deals with contractual claim cases.

The client may want to be advised on how to adduce the evidence and also convince the judge regarding the facts to the case.5 The client may also want be advised on what kind of evidence if in writing to present before the lord judge. Likewise, if it is oral, then the client may want to know how to proof it existence via circumstantial evidence or witnesses. 6

The client may also want to be advised on how to claim and proof damages resulting from the violated contract.7 That is, the claimant after vividly proving that indeed a contract exited and terms were breached, he or she should then proof to the judge that she or he suffered financial loss in the process.

In most cases, the claimant must present beyond reasonable doubt before the judge some evidence to proof the financial loss.8 Specifically, the claimant will also be seeking to know whether the money claimed would solve the problem.9 The client may also want to know the leverage that defendant is likely to get in terms of claim defenses.

Applying relevant principles of law and authority and Legal advice

The aspect of material breach will no doubt come up. In Suisse Atlantique case (1967) House of Lords defined fundamental breach as a contractual breach which entitles the wronged party to treat or a consideration as it is a violation and rescinds the agreement.10 In this case, the judge would want to know among many other things whether the other party (defendant) did not meet (intentionally) his part of the bargain.

Since, the breaching party (Mr. Alfredo) did not intentionally breach the contract; Mr. Cosimo would argue that though was not stated in the contract, it was within the powers of Mr. Alfredo to supply kitchen graphite bench-tops of high quality and right standards.

However, this would not be a material breach as it does not deprive Mr. Cosimo of the real intention and purpose of the deal. In this case, Mr. Cosimo would not be allowed to repudiate the agreement but would only demand for some cure which would be in the form of fixing the issue or reduction in price of the project.

In the case of the money be claimed, it is likely to be less material if the issue at hand is something that can be made good with less expense or reasonable effort, whilst upholding the agreement. Taking into consideration the goodwill by Mr. Alfredo to fix the problems as well as the willingness to acquire material from a supplier of their choice, probably this would not be a material breach, and as such, Mr. Cosimo would not be able to terminate the contract.

The claimant should also consider the chances that the defendant or breaching party will fix the problem.11 In contract law, in the event that the issue is likely to be fixed and that the breaching party has shown intentions to the same, the court is likely to rule that the contractual violation was immaterial. In this case, Mr. Alfredo offered to exchange it for a different type of granite to the same value to be selected by Mr. Cosimo, either from NSH or an alternative supplier. Mr. Alfredo did this as a gesture of goodwill.

The other aspect that Mr. Cosimo should know before proceeding with the court action is whether Mr. Alfredo breached the agreement in bad faith. In contract law, if the violation of the agreement stemmed from bad faith or was willful and the case is taken to a court of law, the judge is more likely to rule in favor of the claimant because of the material breach.12

For instance, if the court establishes that Mr. Alfredo completely ignored the terms of the contract, then he would have materially repudiated the contract.13 However, if it establishes that a breach or violation emanated from circumstances that were beyond the control of Mr. Alfredo then he is not likely to be held responsible for materially breaching the contract.

Alternative Responses to the Issue

The client (Mr. Cosimo) will respond based on the likely defendant’s counterclaims.

Procedural strategies or tactics

In the case of Mr. Alfredo, there are rules of civil procedure which may be strategically employed. For instance, he may begin by applying for summary judgment, or apply for security for costs or apply strike out the claims altogether.14 Mostly, these tactics are used in cases that are highly importance. In such situation, Mr. Cosimo may employ tactics in order to impart pressure on the other side and in the process form part of a winning approach.

Variation of a written contract

Mr. Alfredo could also file a defense particularly based on supposed variation of a contract after it had been performed. That is, Mr. Cosimo only reacted after the granite bench-top had been put. In addition, it was the same material that Mr. Cosimo had checked in July and made an order.

In contract law, it is common practice claim that the agreement was considerably varied by just a conversation, in this case, by facsimile a letter in response so as to dispute the fact it was violated.15 This would eventually put the judge or courts of law in a challenging position since it would require oral evidence which normally takes place only during the final trail.16 As such, the defendant would have managed to buy more time. This tactic would provide the defendant with more time to put together his evidence particularly the oral evidence.

The premise is that any mistake made in court is likely to cost the party a lot therefore there is need to get prepared well. The defendant may as well argue that the contract was varied. In contract law, it is common practice, even where a contract is written, for the defendant to disown and even argue that it was altered or changed and as such, he or she did not in any way contravene the terms of the contract.

This is also a very risky road to be taken by the defendant therefore he or she must buy enough time in order to put down tangible evidence.

Mr. Cosimo should first know that in a contractual claim, the defendant is allowed to raise enough legal defenses. Usually, it is not enough for the defendant to merely deny legal offenses; he or she must counter the claimant’s allegations with reasonable evidence or argument. The main reason for raising these legal aspects at earlier stages is because he or she may not be allowed to raise them at latter stages.

The outcome of the dispute and remedies are available for the parties

The court is likely to rule that the contractual breach was immaterial and as such the contract was still in force. Therefore, the only cure for Mr. Cosimo is to request for materials that fit her desires. In other words, the only remedy available to Mr. Cosimo is reparation with orders to cost. In the case of Mr. Alfredo, the cure would be restatement of the contract with no orders to cost.

Bibliography

Casenote Legal Briefs, Contracts Murphy Speidel and Ayres (Aspen Law & Business, 2008)

Davies, Paul, Graham Virgo and E Burn, Equity & trusts: text, cases, and materials (Oxford University Press, 2013)

Forte, Angelo, Good faith in contract and property( Hart Publishers, 1999)

Furmston, M, G Cheshire, and C Fifoot, Cheshire, Fifoot and Furmston’s law of contract (Oxford University Press, 2012)

Hochster v. De La Tour (unreported, the Queen’s Bench, n.d 1853)

McKendrick, Ewan, Contract law : text, cases, and materials ( Oxford University Press, 2012)

Radan, Peter and John Gooley, Principles of Australian contract law (LexisNexis Butterworths, 2009)

Rowan, Solène, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (OUP Oxford, 2012)

Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)

Stone, Richard, James Devenney and Ralph Cunnington, Text, Cases and Materials on Contract Law (Routledge, 2011)

Societe d’Armament SA v NV Rotterdamsche Kolen Centrale ( Unreported, House of Lords, July 1967)

Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)

Footnotes

1 Radan, Peter and John Gooley, Principles of Australian contract law (LexisNexis Butterworths, 2009)

2 Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)

3 Hochster v. De La Tour (unreported, the Queen’s Bench, n.d 1853)

4 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)

5 Furmston, M, G Cheshire, and C Fifoot, Cheshire, Fifoot and Furmston’s law of contract (Oxford University Press, 2012) 30.

6 McKendrick, Ewan, Contract law : text, cases, and materials ( Oxford University Press, 2012) 390.

7 Forte, Angelo, Good faith in contract and property( Hart Publishers, 1999) 11

8 Casenote Legal Briefs, Contracts Murphy Speidel and Ayres (Aspen Law & Business, 2008) 1-2.

9 Thampapillai, Dilan, Vivi Tan and Claudio Bozzi, Contract law : text and cases (Oxford University Press, 2012)

10 Societe d’Armament SA v NV Rotterdamsche Kolen Centrale ( Unreported, House of Lords, July 1967).

11 Ibid.

12 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)

13 Rowan, Solène, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (OUP Oxford, 2012)

14 Stone, Richard, James Devenney and Ralph Cunnington, Text, Cases and Materials on Contract Law (Routledge, 2011) 1-4.

15 Davies, Paul, Graham Virgo and E Burn, Equity & trusts: text, cases, and materials (Oxford University Press, 2013) 9.

16 Seddon, N, and M Ellinghaus, Cheshire & Fifoot Law of Contract (Butterworths,10th ed, 2012)

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IvyPanda. (2019, June 8). Contract Law: Breach of Contract and Remedies Available. Retrieved from https://ivypanda.com/essays/contract-law-breach-of-contract-and-remedies-available/

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"Contract Law: Breach of Contract and Remedies Available." IvyPanda, 8 June 2019, ivypanda.com/essays/contract-law-breach-of-contract-and-remedies-available/.

1. IvyPanda. "Contract Law: Breach of Contract and Remedies Available." June 8, 2019. https://ivypanda.com/essays/contract-law-breach-of-contract-and-remedies-available/.


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IvyPanda. "Contract Law: Breach of Contract and Remedies Available." June 8, 2019. https://ivypanda.com/essays/contract-law-breach-of-contract-and-remedies-available/.

References

IvyPanda. 2019. "Contract Law: Breach of Contract and Remedies Available." June 8, 2019. https://ivypanda.com/essays/contract-law-breach-of-contract-and-remedies-available/.

References

IvyPanda. (2019) 'Contract Law: Breach of Contract and Remedies Available'. 8 June.

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