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The first thing we generally advise clients dealing with most breach of contract situations is to carefully consider the position, not act hastily and not assume anything in legal terms.
The correct starting point is always to check the terms of any written agreement. Many contracts include clear provisions on what consititutes a breach and the consequences of specific breaches, as well as processes to be followed if a breach occurs.
The next thing to consider is what can be claimed. This involves assessing the type of breach, whether a court claim is likely to succeed, and what other options may be available. It is entirely possible for one party to be in breach of contract, but for the other party to respond incorrectly and inadvertently place themselves in breach as well.
Minor breach – a breach which is not sufficient to give the other party the right to terminate, but instead will generally result in a demand for the breach to be remedied, and potentially claim damages (see below)
Material, fundamental or repudiatory breach - significantly impacts the contract's purpose or sometimes described as going to the heart of the contract, leading to the party not in breach having the option but not the obligation, to terminate the agreement.
Anticipatory breach - occurs when a party declares beforehand their intention to not perform their obligations.
Evidence - gather strong evidence to support your claim, including the contract itself, communication records, and witness statements.
Costs and time - litigation can be expensive and time-consuming. Consider alternative dispute resolution methods like mediation or arbitration for faster and potentially cheaper solutions.
Negotiation - attempting to negotiate a settlement with the breaching party can be a cost-effective and efficient way to resolve the issue.
Relationship – with long term or important contracts, rather than take court action after a breach, it may be better to reserve your rights and take steps to ensure that the breach does not happen in the future. In other words, preserve the ongoing contractual relationship.
Is the other party worth suing? - this is often overlooked. There is no guarantee that a defendant in a breach of contract claim will be able or willing to pay any damages awarded by a court.
Do you have alternative claims? - in some situations you may be able to claim negligence or a breach of statutory duty as an alternative to pure breach of contract.
Anticipate any potential defences or counterclaims - before going down the full legal route, think about whether the other party might seek to fight a claim and if so, in what why, however spurious you may think that is.
Termination - where the breach is a fundamental or repudiatory breach, you may have the option to terminate the contract and walk away from it. This is often not as straightforward as it seems legally, especially if the breach is not expressly defined as a repudiatory breach in the contract..
Specific performance - seeking a court order demanding the other party fulfill their contractual obligations. This is not a standard remedy and is an equitable remedy, meaning it is in the court’s discretion as to whether the remedy is practicable, fair or appropriate.
Damages – claiming compensation for the losses you have suffered due to the breach - see our detailed guide to damages, what's claimable and how they are calculated.
Injunction - a court order preventing the other party from continuing their breach or compelling them to take action. Injunctions are not a standard remedy, are difficult to obtain and are expensive and risky applications.
Consider renegotiating the contract - evaluate the severity of the breach and its impact on your business, your leverage and the other party's willingness to renegotiate. Clearly communicate your expectations and demands during the negotiation process. Keep detailed records of all communications and agreements.
Every breach of contract situation is unique, and the most suitable approach will depend on the specific circumstances and assessment of merits/risks/costs. This is where our experience is valuable to you, together with having a clear strategy and plan. We can often offer a fixed fee for each stage of the dispute, giving you clarity and control over costs.
Please do get in contact to discuss your contract breach situation and how we can help.
Get in touch
If you would like to speak with a member of the team you can contact us on:
Partner & Head of Commercial Litigation
