In This Essay, I Will Be Explaining
In this essay, I will be explaining what is meant by a breach of contract. I will also be outlining the remedies available to the non-breaching party.
A breach of contract is known to be a civil wrong and is also an inexcusable failure by one party to perform his terms within the contract. A contract can be breached when one party may decide to perform their duty inadequately or unlike what was agreed between both of the parties. There are many ways in which a breach of contract can happen. One example is if A decided to purchase goods and services from B for his store and B has failed to deliver those goods and services on time. This is a breach of contract. This is because as B had failed to deliver the goods and services on time to A, this may result in A losing out on profit as consumers will have nothing to purchase from A. If a contract has been breached, then this will allow the innocent party to sue for damages. This is because a party may not have performed to the satisfactory level of what they have been contracted to do.
When a contract is breached, there are many remedies that are available to the non-breaching party. Remedies in contract law allows an amount of money to be given to the innocent party in order to compensate them. Damages falls under one of the common law remedies available to the non-breaching party. The aim of Common law remedies is to put the non-breaching party back to the position they would have been in had the contract been performed the way it was planned to. Damages are an award of money that targets to compensate the non-breaching party for the financial losses they had undergone because of the breach. This remedy was highlighted in the House of Lords in The Golden Victory
Furthermore, the House of Lord had said in this case that:
“if a party suffered no loss when a contract was breached they would receive no damages in compensation.”
The court expresses the fact that even though that the contract was breached, if the non-breaching party did not experience any detriment due to this happening then damages will not be awarded in compensation.
Contract damages most usually side towards compensation for Pecuniary loss. This intends to reimburse the non-breaching party for the losses they have incurred financially that gives a result in not having the performance which they had contracted for. In terms of pecuniary loss, this can include physical damage to the claimants, their property as well as harm to their economic position. Furthermore, there is also non-pecuniary loss. This damage supports in compensating the claimant for experiencing symptoms that was caused by the breach of contract. Although, damages in non-pecuniary losses are not really recoverable in contract but will be better to succeed in Tort Law. Addis v Gramophone Co Ltd is one of the key cases which clearly outlines the restriction for damages for non-pecuniary losses for breach of contract. In this case, the House of Lords had held that
“he is able to recover the usual damages for loss of salary and commission, but not for the injury to his feelings caused by the way in which he was sacked.”
Primarily, this shows that although the non-breaching party is able to claim damages for the financial loss the innocent party had incurred, they cannot consider the suffering of his mental pain. However, current cases, such as Jarvi v Swarns Tours Ltd which is a leading case showcasing where plaintiff was awarded damages that he had incurred financially but also the damages for which has caused his mental distress. Lord Denning had said in the Court of Appeal:
“If the contracting party breaks his contract, damages can be given for the disappointment, the distress, the upset and frustration caused by the breach.”
In this case, one of the purposes of the contract was for pleasure, relaxation and peace of mind. If this is not met, then damages may be awarded for the disappointment and frustration. This was the outcome in this case.
There are also Equitable remedies.