Breach of Contract

A breach of contract occurs when one party fails to perform part or all of their side of the bargain. Major/Serious Breach – Choice of ending or continuing with the contract, as well as claiming damages. (Repudiation – Ending contract because of serious breach by the other party). Minor/Trivial Breach – Must continue with the contract, although can claim damages for any losses. Electrician fails to change one socket in the house – Trivial Breach. Electrician fails to change the whole upstairs of the house – Serious Breach. The law decides whether a breach of contract is serious, enough by deciding which type of term in the contract has been broken. A term in a contract is known as either a condition or a warranty. (Warranty (in the context of this work) is not connected to the everyday meaning of the word).

A condition is a term of the contract that goes to the heart of the contract: -          If I rent a car, one term of the contract that will be a condition is that the car will actually go and stop. If it does not, then clearly I would want to end the contract. A warranty, on the other hand, is a minor term of the contract: -          If I rent a car and the rental company offers me one, which has a CD changer, if the CD changer does not work I will still have a useable car, but would expect to pay less. This would be a warranty and I would have to continue with the contract.

Statement True or False? All contracts have to be in writing and signed to be enforceable.  False   Consideration is the price a party pays for what he is getting in return from the other party. True   Breach of a warranty will automatically end the contract.  False Breach of a condition is more serious than a breach of warranty. True  

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