Contract breach lawsuits
Contract breach lawsuits where there is a contract and the clauses are enforceable
What is a contract?
A contract is an agreement between individual(s) or organisation(s) (the “Parties”) that sets out the benefits and responsibilities of the Parties between themselves.
What are contract breach lawsuist?
Company A wants to install a completely new computer network system and approaches Company B to supply and maintain the new system. After a number of meetings, someone at Company A signs a quotation attached to an agreement to supply and maintain the new system. The quotation says that Company A shall make 4 instalments of £250,000 each to Company B as payment for the supply and maintenance of the new computer system. Company A then realises that they could have got a much better deal elsewhere and wish to cancel the contract with Company B. Company A writes to Company B refusing to pay, saying that the contract is cancelled because of, amongst other things, the cooling off provisions of the distance selling regulations.
When a party fails to perform an obligation under a contract or performs an obligation improperly then this is said to be a “breach of contract”. In this case Company B will say that by trying to cancel the alleged contract Company A is in breach of contract. When one Party makes it clear that it does not intend to fulfil the contract it is considered an anticipatory breach. When Company A states clearly that performance will not happen it is said to be an “anticipatory repudiation”. If Company behaves in a way that clearly demonstrates it is not going to perform it is an “anticipatory breach by conduct”.
What are the remedies for contract breach lawsuits?
In the case study above, Company B may sue for breach of contract. In the scenario of an anticipatory repudiation Company B may wait for the time the obligation is supposed to be performed or they could sue immediately in an action for damages. Damages to compensate Company B for breach of contract fall into two types: ‘expectation’ or ‘reliance’ damages. ‘Expectation’ damages are intended to put Company B in the position it would have been in if Company A had met its obligations under the contract.
Expectation damages are generally the way damages for breach of contract are assessed. Damages for loss of expectation are measured in four ways: the cost of rectification; difference in value between the actual and expected performance; difference in cost to Company B between actual and expected performance; and loss of amenity. Reliance damages or wasted expenditure losses are incurred where Company B decides that expectation losses are inappropriate. Reliance damages seek to compensate Company B from losses incurred as a result of relying on Company A’s alleged promises. You cannot recover both expectation losses and reliance losses.
In some cases Company B may be able to compel Company A to perform its obligations under the agreement, known as “specific performance”. Company B may also be able to get an injunction to enjoin Company A from doing something that was prohibited by the broken contract.
Company B may also rescind the agreement if the breach was of a material term; and Company A returns everything to its original position before the contract was made.
Why should I consult with contract breach Lawyers?
You should consult with Contract Lawyers if you are Company A in this scenario because it is not always the case that there is an agreement. Amongst other things, the fact that only a quotation was signed may make a difference. In the above example the distance selling regulations are irrelevant in assisting Company A. In other words, there are several esoteric legal issues as well as county court and high court civil procedure rules
to consider when bringing or defending a claim for breach of contract.
What are examples of contract breach lawsuits we have dealt with in the past?
We have acted for both the Claimant and Defendant in computer hardware and software installation and maintenance cases.
We draft web related contracts such as wholesale broadband services master agreements, and have represented both Claimant and Defendant in broadband related cases. The issue usually is centred on whether the supply of wholesale broadband meet industry standards and norms and if they are fit for purpose? The question is whether the various problems you may have with the services are the kind to be expected as customary in the provision of wholesale broadband services or whether they indicate a failure to provide a suitable service? It is normal to find the obligation in the Master Agreement that the wholesale broadband supplier will “exercise the reasonable skill and care of a telecommunications service provider”.
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