Breach of Contract

Breach of Contract

1. When something goes wrong in a contractual relationship, clients tend to see the impugned conduct as allowing them to terminate the contract

2. Three classifications

   • Condition
     • Breach of condition allows innocent party to: terminate contract and claim damages
   • Warranty
     • A breach of warranty allows innocent party to claim damages only
   • Innominate term
     • Breach of innominate term allows innocent party to terminate contract and claim damages or claim damages only depending on courts decision

3. Damages are always available for breach

4. Was a term of less importance breached or was the defending party's conduct 'so bad as to negate the contract as a whole'

   • Can ask for damages for the whole contact, such as what the innocent party expected to have if the contract were properly perfomed
   • 'small breach' where the contract is not terminated and damages alone are awareded

5. Kingston v Preston (1773) 2 Doug. 689

   • Gives us language of condition

6. Bettini v Gye (1876) 1 QBD 183

7. Poussard v Spiers and Pond (1876) 1 QBD 410

8. Terms may be classified by statute, by court or the parties themselves.

   • Condition - warranty dichotomy prompts certain way of viewing contract terms. Focuses on the importance of the term as opposed to significance of breach of contract
   • Examples of classification by statute can be seen in Sale of Goods Act 1893 ss.11-12
   • Classification by Courts
     • Arcos v Ronaasen [1933] AC 470
     • Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos) [1971] 1 B.B. 164 (CA)
   • Classification by parties
     • Aerial Advertising Co. v Batchelor's Peas Ltd [1938] 2 All E.R. 788
     • Lombard North Central v Butterworth [1987] 1 All ER 267 (CA)

9. Innominate term (intermediate term)

   • Must consider whether breach justifies termination based on the seriousness of the consequences of the breach and not the importance of the term broken
   • Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha [1962] 1 All ER 474 (CA)