BREACH OF CONTRACT,

REMEDIES AND KINDS

THE BREACH OF CONTRACT CONCEPT
 Breach of contract is a legal cause of
action in which binding agreement or
bargained-for exchange is not honored by one
or more of the parties to the contract by non-
performance or interference with the other
party's performance
BREACH OF CONTRACT
 Action:  Time:
Failure to perform i.
precisely and exactly his
obligation under the
contract without any
legitimate legal excuse.
 Example:
i. not completing a job ii.
ii. not paying in full/on
time
iii. failure to deliver the
goods
Actual beach occurs
where one party
refuses to perform his
obligation on due date
or performs
incompletely.
Anticipatory breach
occurs where one
party announces, in
advance of the due
date, that he intends
not to perform his
obligation.
AT BREACH OF CONTRACT
The innocent party has two options:

1. He may elect to treat the contract as still

valid, complete his obligation and sue for
payment from other side.
2. He may treat the contract as discharged
and bring a action for damages for breach
o contract immediately.
KINDS OF BREACH OF CONTRACT
 There are 4 broad kinds of breach of contract
 Minor breach

 Material breach

 Fundamental breach

 Anticipatory breach
 MINOR BREACH:
 A minor or partial breach is when the non-
breaching party of the contract is not entitled to
an order for performance of its obligations but
only to collect the damages for which they are
owed. For instance,
 MATERIAL BREACH:
 A material breach is when there is a failure to
perform a part of a contract that permits the
other party of the contract to ask for damages
because of the breach that has occurred
 FUNDAMENTAL BREACH:
 A fundamental breach of a contract is when
the person that has had the contract breached
against can sue the breaching party for damages
incurred as well as terminate the contract if they
wish to do so.
 ANTICIPATORY BREACH:
 An anticipatory breach of a contract is when
the non-breaching party realizes that the other
party of the contract will fail to perform his or
her part of the contract in the future and can
terminate the contract and sue for damages
before the breach happens.
REMEDIES FOR BREACH OF CONTRACT

 Rescission of the contract.

 Suit for damages.

 Suit upon quantum meruit.

 Suit for specific performance.

 Suit for injunction

RESCISSION
 On breach of contract, the innocent party may
treat the contract as rescinded and is absolved of
all obligations under the contract.
Example:
 A contract to supply cotton to B on 12 dec. B
agrees to pay the price on receipt of cotton. A doe
not supply on due date. B is discharged from
liability to pay. B can rescind and claim damages.
SUIT FOR DAMAGES
A monetary compensation awarded to the injured
party for loss faced by him.

Kinds of damages:
 Ordinary Damages
 Special Damages

 Nominal Damages

 Liquidated Damages
QUANTUM MERIT
- AS MUCH AS IS MERITED-
the reasonable value of work done

Claim on quantum merit arises from the following:

 When the contract is discovered to be void.
 Where something has been done

 When one party refuses to perform the

contract.
 Where the contract is divisible
SPECIFIC PERFORMANCE
-TO DO THE JOB AS AGREED UPON-
Specific performance is granted in the following
cases:
 When compensation in money is not an
adequate relief.
 When there is no standard for calculating the
actual damage caused by the non-performance.
 When the compensation can not be obtained.
INJUNCTION
-TO RESTRAIN A PERSON FROM DOING
SOME ACT-

A preventive measure suitable in anticipatory

breach
Example: (Warner bros. vs nelson)
A film actress agreed to act exclusively for WB
for two years and not for anyone else. But
during this period, she contracted to act for z
also. Held, she could be restrained by injunction
from doing so.
A PRACTICAL EXAMPLE OF BREACH
 Breach of Contract
 Heritage Propane Partners, based in Tulsa, OK, sued SCANA, South
Carolina’s largest utility company in 2003, in a contract dispute arising over
the bidding process and ultimate sale of SCANA’s propane businesses.
 Heritage, now known as Energy Transfer Partners, was approached by SCANA
through a SCANA subsidiary, Cornerstone Ventures, about purchasing five of
SCANA’s propane companies. As part of the solicitation, Heritage and
Cornerstone signed a confidentiality agreement that all information connected
with the bid process was to be kept confidential. After a lengthy and expensive
process – Heritage told Cornerstone it wished to buy the companies and offered
an initial bid. After further negotiations, the two sides came to agreement on
all outstanding issues and shook hands. The SCANA senior management team
told Heritage, “we have a deal.” The two sides continued to work on finalizing
the written documents, agreeing that Heritage would meet with propane
employees prior to announcing the agreement publicly. However, SCANA kept
delaying the final contract. It turned out that Heritage had been used only as a
“stalking horse” to garner a higher bid from another buyer. All the time,
expense and expertise that Heritage had expended had only been used to
facilitate transactions with a second bidder, enriching the bidder and SCANA
at Heritage’s expense. Breach of contract, fraud and punitive damages
awarded--$48 MILLION
