Breach of contract claims: A short guide

What is a breach of contract?

 

Under English law, a breach of contract occurs when one party fails to fulfil obligations under a contract without a lawful excuse. This failure can take many forms, such as failing to deliver goods or services, failing to make payment, or failing to meet a deadline.

A breach of contract can be either a material breach or an immaterial breach. A material breach is a breach that goes to the root of the contract, making it impossible for the other party to receive the benefit of the contract. An immaterial breach, on the other hand, is a breach that does not fundamentally affect the contract, and may not entitle the innocent party to terminate the contract or seek damages.

In the event of a breach of contract, the innocent party may seek remedies such as damages, specific performance, or an injunction by pursuing a claim. The appropriate remedy will depend on the circumstances of the breach and the terms of the contract.

To find out if you could bring a claim for breach of a legally binding contract, read our guide below.

Types of breach of contract claims

 

There are several types of breach of contract claims that can arise depending on the nature and circumstances of the breach. Some common types of breach of contract claims include:

  • Anticipatory breach: This occurs when one party informs the other party that they will not be able to perform their obligations under the contract before the performance is due. The innocent party can then treat this as a breach of contract and take legal action.
  • Material breach: This is a breach that goes to the heart of the contract and deprives the innocent party of the main benefit of the contract. The innocent party can terminate the contract and claim damages.
  • Minor breach: This is a breach that does not go to the heart of the contract, but still constitutes a breach of the contract. The innocent party can claim damages but cannot terminate the contract.
  • Fundamental breach: This is a breach that is so serious that it undermines the entire contract. The innocent party can terminate the contract and claim damages.
  • Repudiatory breach: This is a breach that shows that the party in breach no longer intends to perform their obligations under the contract. The innocent party can terminate the contract and claim damages.
  • Breach of warranty: This is a breach of a term in the contract that is not a condition or an innominate term. The innocent party can claim damages but cannot terminate the contract.
  • Breach of condition: This is a breach of a term in the contract that is fundamental to the contract. The innocent party can terminate the contract and claim damages.

The appropriate legal remedies available to the innocent party will depend on the type of breach of contract claim and the specific facts of the case.

Entitlement to sue for breach of contract

 

To make a breach of contract claim under English law, the following elements must generally be established:

  • Formation of a contract: There must be a valid and enforceable contract between the parties, with clear terms and obligations.
  • Breach of the contract: There must be a breach of the contract by one of the parties, such as a failure to perform a contractual obligation or a failure to comply with the terms of the contract, including implied terms.
  • Materiality of the breach: The breach must be material, meaning it goes to the heart of the contract and deprives the innocent party of the main benefit of the contract.
  • Loss suffered: The innocent party must have suffered loss as a result of the breach, such as financial loss or damage to reputation.
  • Causation: The loss suffered must be caused by the breach of the contract.
  • Mitigation: The innocent party must have taken reasonable steps to mitigate their loss, such as finding alternative suppliers or customers.
  • Time limits: There may be time limits for bringing breach of contract claims, depending on the terms of the contract and the applicable law.

If all of these elements are present, the innocent party may be entitled to remedies for a breach of contract such as damages, specific performance, or an injunction. However, the specific remedies available will depend on the facts of the case and the terms of the contract.

Breach of contract claims process

 

Under the Civil Procedure Rules (CPR) in England and Wales, there is a pre-action protocol for breach of contract claims. The pre-action protocol sets out a series of steps that parties should take before starting court proceedings, with the aim of resolving the dispute without the need for litigation.

The pre-action protocol for breach of contract claims includes the following steps:

  1. Letter of claim: The claimant must send a letter of claim to the defendant, setting out the details of the breach of contract and the remedies sought. The letter should also include relevant documents and evidence.
  2. Response: The defendant should respond to the letter of claim within a reasonable time, setting out their position on the claim and any evidence or documents they wish to rely on.
  3. Alternative dispute resolution (ADR): The parties should consider using ADR to resolve the dispute, such as mediation or arbitration. If ADR is used, the parties should agree to suspend the pre-action protocol while the ADR takes place.
  4. Court proceedings: If the dispute cannot be resolved through ADR, the claimant may start court proceedings. However, the parties should continue to exchange information and consider settlement throughout the proceedings.

The pre-action protocol for breach of contract claims aims to encourage early communication and settlement between the parties, with the aim of avoiding costly and time-consuming court proceedings. Parties that fail to comply with the pre-action protocol may face penalties, such as costs sanctions, if they are successful in their claim.

How our panel of solicitors can assist

 

If you were party to a contract that has been breached and you suffered a loss as a result, a solicitor from our panel may be able to assist based on the merits of your claim.

Our team take the stress out of finding you a solicitor to assist on your commercial law issue. We have assisted many UK businesses and individuals in finding the right lawyer for their case, providing cost effective solutions to commercial litigation.

We are not a firm of solicitors; however, we have a panel of commercial law solicitors who are authorised and regulated by the Solicitors Regulation Authority. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm. We receive a fee from solicitor firms in return for passing your case on; however, we will never charge you for our services.

Our panel of commercial solicitors assist on a wide range of cases, including breach of contract claims.

Get in touch today to speak to a commercial law solicitor from our panel.

We also assist with shareholder disputes, CCJ removal, fraud and restrictive covenants.

 

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Please note, we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm. 

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