business law breach of contract case study

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Breach of Contract Case Study from TonaLaw

TonaLaw helps business parties reach amicable, confidential settlements, before trial.

Is someone you worked with in “Breach of contract”?  This is is a  legal   cause of action  and a type of  civil wrong , in which a  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 occurs when a party to a contract fails to fulfill his or her obligation as described in the contract or communicates an intent to fail the obligation or otherwise appears not to be able to perform his or her obligation under the contract.

CASE STUDIES:

1: Represented Defendant in a Suit for Breach of Contract on Promissory Note 

TonaLaw represented a not-for-profit charitable organization being sued by a former member on a breach of a promissory note. It was a frivolous action as the defendant was not in breach of the promissory note and it was paid in full. The suit was for approximately half a million dollars.

After two years of extensive pretrial motions and negotiations, Tonalaw settled the case for our client for $7,500, when the client was being sued for $1,000,000.

2: Represented Plaintiff in a Suit for Breach of Contract on a Promissory Note 

We represented the plaintiff’s estate in this action where the decedent lent approximately $125,000.00 to the defendant. When the plaintiff died, the defendant had not repaid the debt, resulting in a breach of contract.

TonaLaw filed a summary judgment motion in order to have the judge rule that the defendant was liable for the debt, and the motion was granted. The only unresolved issue was how much the defendant owed. TonaLaw negotiated a confidential settlement between the two parties and the case did not have to go to trial.

3: Subcontractor Vs. General Contractor

TonaLaw represented the plaintiff, a subcontractor, in an action against the defendant, who was a general contractor. The defendant subcontracted close to $139,000.00 worth of work to the plaintiff but defaulted on approximately $60,000.00 worth of payments. TonaLaw helped the parties reach an amicable, confidential settlement before trial.

“Tom has been my litigation lawyer for my construction business since 2009 when he took on a certification appeal that was difficult, tedious, and involved countless paperwork. He successfully won the certification for me and I have kept him on ever since. He has assisted in money collection and contract negotiations with positive results . . . Most recently he aided my company in obta ining the proper representation in an intricate workers comp case we became involved in and was the motivating factor in putting together the legal defense to mitigate culpability and costs. I trust Tom implicitly for both my business and personal needs. He is always available for help, advice, and is genuinely invested in who he represents not just as a client but as a person. I commend his staff as well for always being friendly, courteous, and again genuine with what they do. I would highly recommend him!!!!” – Diana A.

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Breach Of Contract Examples Cases: Everything You Need to Know

Breach of contract examples of cases can include any scenario in which one or more parties that are legally bound to uphold the terms of a contractual agreement fail to meet their obligations. 3 min read updated on February 01, 2023

Updated October 14, 2020 : 

Breach of contract examples of cases can include any scenario in which one or more parties that are legally bound to uphold the terms of a contractual agreement fail to meet their obligations. In these cases, it is usually warranted for the other involved parties to pursue legal action for sustained damages or in an effort to enforce the execution of the original agreement.

Definition of Breach of Contract

When parties involved in a contract, whether that contract is established orally or in writing, fail to uphold their part of the agreement, it's possible to determine them to be in breach of contract. There are a number of ways in which a breach of contract might occur but the most common include:  

• Failing to deliver services or goods  
• Failing to complete a job  
• Failing to pay in a timely manner  
• Providing services or goods that are subpar  

In simple terms, a breach of contract happens when promises are broken or somebody fails to provide things that are included in the terms of the agreement.

The formal definition of a breach of contract includes the following:  

• Unjustifiably failing to adhere to the terms of a contractual agreement. 
• Violating an agreement by failing to perform or interfering with another party's ability to meet their obligations under the contract.

Breach of contract is among the most common reasons behind lawsuits in the United States and can occur in a number of ways. Established laws offer a variety of ways to remedy a breach that are designed to make things right for the injured party. These court-ordered remedies are not designed to act as a punishment for the party guilty of a breach of contract, however. Rather, they are meant to act as a means to restore the injured party to the position they would have been in if the breach had never happened.

There are a number of forms a breach of contract might take, such as:

• A partial breach of contract
• A material breach of contract
• An anticipatory breach of contract
• A specific performance breach of contract

Breach of Contract Elements

To successfully pursue a lawsuit for breach of contract, certain elements need to exist including:  

• Proof that a valid contract exists  
• Proof that the contract's terms have been breached  
• Actual losses or damages  

In other words, this means that there must be a contract in place that can be validated in court. However, it's not a requirement for the contract to be in writing. Oral contracts can just as easily be held up in court. There are three things that need to be established to prove that a valid contract is in place :  

• A contractual offer  
• Acceptance of the terms of the agreement  
• Considerations have been received   

In examples of breach of contract cases , an offer includes discussions regarding the agreement to provide services or goods in exchange for something of value. It is also necessary to demonstrate an intention to enter into the agreement with one another.  Acceptance refers to the act of agreeing to the terms associated with the exchange outlined in the agreement. While it's not necessary for a contract to be in writing for it to be held up in court, it is usually easier to prove that the agreement has been accepted due to the fact that a legal document exists which specifies the terms each party has agreed to.  

Consideration refers to products, services, or some other thing of value that each involved party has received (or intended to receive) as a result of the contract. If one party promises to provide something without getting anything back in return, however, it tends to look like a gift. This is important to note because gifts cannot be enforced as considerations and this may prevent the ability to successfully pursue legal action for a breach of contract.

Additionally, past agreements that were written to cover the provision of services or goods are not considered to be a valid contract. The contract needs to be agreed upon before an exchange happens for it to hold up in court. A breach of contract happens when the terms of a contract are not adhered to. It is important to note that not every term of the contract will be taken literally. For legal action to be warranted, a breach of contract must actually decrease the overall value of the agreement. This is what is known as a "material breach of contract."

If you need help with a breach of contract case, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

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Contracts Cases Outline

Contract law concerns the creation and enforcement of binding agreements between parties. Generally, the elements of a legally enforceable contract are assent, a valid offer, acceptance, and consideration. Most contract law concepts stem from common law, but some come from other sources, such as the universally adopted Uniform Commercial Code (UCC). Below is an outline of key cases in contract law with links to the full text of virtually every case, provided free by Justia.

• 2 Mutual Misunderstanding
• 4 Destroying an Offer
• 5 Option Contracts
• 6 Acceptance
• 7 Imperfect Acceptances
• 8 Consideration
• 9 Reliance and Promissory Estoppel
• 10 Contract Terms
• 11 Integrated Agreements
• 12 Conditions Precedent
• 13 Definiteness
• 14 Unconscionability
• 16 The Statute of Frauds
• 17 Breach of Contract
• 18 Anticipatory Repudiation
• 19 Excusing Conditions
• 20 Remedies

Assent binds parties in a contract. Assent is measured by the outward manifestations of the parties, rather than the inner, private, or secret intentions of the parties. Assent may be found when a reasonable person in the situation would have believed that there was assent, even if one party lacked subjective intent to be bound.

Lucy v. Zehmer 一 A contract is enforceable if one party reasonably believes that the other party has sufficient intent to enter into the agreement, even if the other party actually does not.

Leonard v. Pepsico, Inc. 一 Generally, an advertisement is not an offer. In evaluating whether an advertisement was an offer, a court will not consider the subjective intents or views of the parties, but what an objective, reasonable person would have understood.

Gleason v. Freeman 一 Whether a binding contract exists depends on the objective expressions of intent to be bound and the definitiveness of the terms of the agreement. When a party’s words create doubt as to their intent to be bound, a court will consider the situation and conduct of the parties under the circumstances. Continuing to negotiate an agreement’s terms may be evidence that the parties did not intend to be bound.

Mutual Misunderstanding

There is no mutual assent if the parties attach materially different meanings to their manifestations. However, the meaning attached by one party may control if that party does not know or have reason to know of a different meaning attached by the other and the other knows or has reason to know of the meaning attached by the first.

Raffles v. Wichelhaus 一 A contract is invalid if there is no meeting of the minds, as is the case when there is a mutual mistake.

An offer is a manifestation of assent by an offeror to an offeree that the offeror commits to a deal on specific terms and gives the offeree the power to assent to the terms and make a contract. If the so-called offeree knows that the so-called offeror does not intend to give the offeree the power to make a contract by simply accepting, there is no offer.

Lonergan v. Scolnick 一 An invitation for offers is not by itself an offer to form an enforceable contract.

Maryland Supreme Corp. v. Blake Co. 一 A mere price quotation and an invitation to enter into negotiations is not an offer, but whether an offer was made depends on the intention of the parties and the facts and circumstances of the case.

Sateriale v. R.J. Reynolds Tobacco Co. 一 An offer to enter into a unilateral contract may exist when an advertiser, in clear and positive terms, promises performance in exchange for something requested by the advertiser, and the recipient of the advertisement reasonably may conclude that acting in accordance with the request would form a contract. Advertisements may be offers when they invite the performance of a specific act without further communication and leave nothing for negotiation. If the offeror retains some discretion in performance, this does not preclude the existence of an offer.

Destroying an Offer

There are four general ways to destroy an offer: rejection or counteroffer, revocation, lapse, or death or incapacity. An offer may be effectively revoked if the offeree learns that the offeror no longer intends to keep the offer open, even if the offer is not expressly revoked. An offer may lapse after a reasonable period of time, depending on the circumstances surrounding the offer.

Dickinson v. Dodds 一 A promise to keep an offer open for a certain period of time is not binding without the consideration and acceptance necessary to form a binding agreement. One cannot accept an offer when they have knowledge that the offeror’s mind is no longer in agreement, even if the offeror did not expressly retract the offer.

Minnesota Linseed Oil Co. v. Collier White Lead Co. 一 An acceptance must be made within a reasonable time after an offer is received, as defined by the circumstances of the case.

Option Contracts

An option contract is a promise that the offeror’s right to revoke their offer will be limited, usually by a period of time. An offer is generally binding as an option contract if it is in writing and signed by the offeror, includes purported consideration, and proposes an exchange on fair terms within a reasonable time. (An offer may also be binding as an option contract if it is made irrevocable by statute.)

Beall v. Beall 一 An option agreement must be supported by consideration to be binding. Otherwise, it is a mere offer to sell, which may be revoked at any time before acceptance. However, an option may be binding if it is accepted within the time limit and before the offer is withdrawn.

Board of Control of Eastern Michigan University v. Burgess 一 One dollar may be valid consideration for an option to purchase land, so long as the dollar is paid or tendered. Written acknowledgment of receipt of consideration merely creates a rebuttable presumption of consideration. If an option contract fails for lack of consideration, the underlying offer will not be affected. However, the underlying offer may then be revoked at any time.

An offeree exercises their power to create a contract by accepting an offer. An offeree usually has a reasonable period of time to accept an offer, unless the offer specifies a time limit. Conduct by both parties recognizing the existence of a contract may be sufficient to show an agreement, even if the moment when a sufficient agreement was formed cannot be determined.

La Salle National Bank v. Vega 一 There is no offer when the so-called offer is not intended to give the so-called offeree the power to make a contract. A contract may dictate certain requirements for acceptance and may specify the mode of acceptance required.

Ever-Tite Roofing Corp. v. Green 一 If the time limit to accept is not specified in the offer, it is within a reasonable period of time. What constitutes a reasonable period of time is determined by the nature of the proposed contract, usages of business, and other relevant circumstances that the offeree knows or has reason to know at the time of acceptance.

Maryland Supreme Corp. v. Blake Co. 一 Conduct by both parties recognizing the existence of a contract may be sufficient to show an agreement, even if the moment when a sufficient agreement was formed cannot be determined. In addition to any contractual language, usage of trade, course of dealing and performance, and general circumstances may be used to determine the terms of the parties’ agreement.

Hendricks v. Behee 一 A valid contract is only formed when acceptance of the offer is communicated to the offeror. Similarly, a revocation is only effective when it is communicated to the offeree before acceptance. Communication of acceptance of a contract to an agent of the offeree does not bind the offeror. However, when an agent of the offeree obtains notice that the offer was withdrawn, that notice is binding upon the offeree.

Adams v. Lindsell 一 Under the mailbox rule, an offer is accepted when the acceptance is put into the mail by the offeree.

Carlill v. Carbolic Smoke Ball Co. 一 An advertisement may be an express contractual promise to pay when evidence of the advertiser’s sincerity, such as a deposit of the reward in a bank, would lead a reasonable person to think that they had the power of acceptance. Acceptance of such an offer may be made by performance, and no prior notice of the acceptance is required.

Marchiondo v. Scheck 一 An offer that invites acceptance by performance, which does not also invite acceptance by promissory acceptance, may not be revoked after performance has begun. Beginning performance effectively creates an option contract conditional on completed performance in accordance with the offer’s terms.

Imperfect Acceptances

Imperfect acceptances (or implied rejections) may take the form of counteroffers, acceptances with conditions, or responses containing new terms. Under the mirror image rule, acceptance generally must be coextensive with the offer and may not include additional terms or conditions. The mirror image rule is different for transactions falling under Section 2-207 of the UCC.

Gresser v. Hotzler 一 Under the mirror image rule, acceptance must be coextensive with the offer and may not introduce additional terms or conditions. Immaterial variations included in an acceptance will not hinder contract formation. However, a material term or condition introduced in the acceptance may preclude contract formation.

Diamond Fruit Growers, Inc. v. Krack Corp. v. Metal-matic, Inc. 一 Under UCC Section 2-207, a common-law counteroffer containing different or additional terms operates as an acceptance if the responding form includes a definite and seasonable expression of acceptance. Between merchants, such terms become part of the contract unless the offer expressly limits acceptance to its terms, the terms materially alter the contract, or a party objects to the terms. If the definite and seasonable expression of acceptance is expressly conditioned on assent to the different or additional terms, a contract is not created unless the offeror assents to the new terms. If the conduct of the parties recognizes the existence of a contract, but the offeror does not assent to the new terms, only the terms on which the parties’ forms agree will remain, and any other terms may be replaced with UCC terms.

Klocek v. Gateway, Inc. 一 Additional terms included with a product do not become part of a contract if the purchaser is not a merchant, unless the purchaser expressly agrees to them.

Hancock v. American Telephone & Telegraph Co., Inc. 一 Clickwrap agreements, which require a computer user to consent to terms and conditions by clicking on a dialog box, are typically upheld when they were clearly presented to the consumer, and the consumer had an opportunity to read the agreement and unambiguously accepted the terms.

Consideration

Consideration may be virtually anything for which one would bargain in exchange for a promise. Consideration may be a return promise, some kind of property, an affirmative action, or the forbearance of a legal right. Usually, consideration is a return promise. A contract will be unenforceable if it lacks consideration or an adequate substitute.

Reed v. University of North Dakota 一 Surrender of a legal right by signing a release form in exchange for participation may constitute consideration.

McCormick v. Dresdale 一 The forbearance of a legal right may qualify as valid consideration for a settlement agreement, but claims forgone that were false and made in bad faith may not constitute valid consideration.

Kirksey v. Kirkse y 一 A mere gratuitous promise without consideration is not enforceable, even if the promisee reasonably relied upon the promise and incurred a detriment.

Hamer v. Sidway 一 The forbearance of a legal right may still be valid consideration even if such forbearance benefited the promisee and did not benefit the promisor.

Schnell v. Nell 一 Consideration of one cent, which is clearly nominal, cannot support an exchange of $600. Furthermore, a moral consideration cannot support a promise, nor will a compromise of a legally groundless claim. Past services, love, and affection cannot be legal consideration for the promise to pay money to a third person.

Hooters of America, Inc. v. Phillips 一 There is no consideration if a return promise is in fact illusory. An illusory promise is one that makes performance optional and is, therefore, no promise at all. A promise to arbitrate when one party retains the right to modify or terminate the agreement, thereby creating an imbalance of obligation, is an illusory and unenforceable promise.

Alaska Packers’ Ass’n v. Domenico 一 There is no consideration when a party refuses to perform that which they are already bound to perform until the other party agrees to increased compensation for that same performance.

Angel v. Murray 一 A contract modification is generally unenforceable without additional consideration, and a promise to perform a pre-existing duty is not valid consideration. However, if the parties voluntarily and in good faith agree to a modification, it may be enforced without additional consideration if it is made to fairly and equitably address unexpected or unanticipated circumstances that arise during performance.

Reliance and Promissory Estoppel

When a promisee reasonably and foreseeably relies on a promise to their detriment, the promise is enforced to avoid injustice. Similarly, when an offeror should reasonably expect to and does in fact induce the offeree’s substantial action or forbearance before acceptance, a binding option contract may be enforced to the extent necessary to avoid injustice.

Ricketts v. Scothorn 一 When a promisee alters their position for the worse in reliance on a promisor’s promise, and the promisor should have expected that alteration as a reasonable and probable consequence of their promise, the promise may be enforced under the doctrine of equitable estoppel.

Dixon v. Wells Fargo Bank, N.A. 一 It is not necessary that there be an intent to mislead or deceive for an otherwise unenforceable contract to be enforced under the doctrine of promissory estoppel. Instead, under the circumstances, it must be unjust to allow one party to walk away from the natural or reasonably anticipated detrimental consequences of their representations or conduct when they take advantage of or string along another party. In such cases, pre-contractual liability should be limited to reliance expenditures.

Salsbury v. Northwestern Bell Telephone Co. 一 For reasons of public policy, charitable subscriptions should be binding even if there is no consideration or detrimental reliance.

Contract Terms

Contracts may contain both express and implied terms. If a dispute arises because contract language is ambiguous, a court may consider evidence other than the language contained therein, such as the circumstances surrounding the contract. Courts sometimes infer contract terms by examining circumstances such as course of performance, course of dealing, and usage of trade.

Threadgill v. Peabody Coal Co. 一 A party may be bound by trade usage if they had actual knowledge of the trade usage, or if the trade usage was so well established as to suggest constructive knowledge. When a party has not expressly agreed to be bound by trade usage, it may only be binding if it is reasonable, generally meaning that the usage must not be illegal or violative of public policy.

Wood v. Lucy, Lady of Duff-Gordon 一 An implied promise may exist when a contract’s express terms lack mutuality of obligation.

Billman v. Hensel 一 Financing clauses impose an implied obligation to make a reasonable and good-faith effort to satisfy the condition. A promisor cannot be excused from performance because of a condition precedent when they prevented the performance of the condition themselves.

Locke v. Warner Bros., Inc. 一 A contract that gives one party discretion affecting the rights of the other party imposes a duty to exercise that discretion in good faith and in accordance with fair dealing. In cases of subjective satisfaction, so long as dissatisfaction is asserted in good faith, it does not matter whether such dissatisfaction is reasonable.

Traders Bank v. Dils 一 Generally, there is no fraud when a promise is not performed, but an exception exists when the device used to accomplish the fraud is the promise itself. Fraudulent inducement is based on a party’s fraudulent representation of their intention to perform, rather than a breach of the agreement to perform.

Frigaliment Importing Co. v. B.N.S. Int’l Sales Corp. 一 When a contract term is in dispute, a court will consider the language of the contract; definitions of the term from other sources, such as dictionaries and regulations; the circumstances surrounding the agreement, including preliminary negotiations; trade usage; and course of performance. A court will also consider whether one party knew or should have known how the other party interpreted the contract.

Random House, Inc. v. Rosetta Books LLC 一 Contract language is ambiguous if a reasonably intelligent person who has considered the context of the agreement and applicable customs, practices, usages, and terminology could objectively interpret the language in more than one way. If contract language is ambiguous, a court will consider extrinsic evidence to interpret it. If contract language can most reasonably be read to convey one certain meaning, the party wishing to deviate from that interpretation bears the burden of negotiating for language expressing that deviation.

Integrated Agreements

Only a binding, completely integrated agreement discharges prior agreements to the extent that they are within its scope. An agreement is not completely integrated if it omits a consistent, additional agreed term either agreed to for separate consideration or naturally omitted under the circumstances.

Trident Center v. Connecticut General Life Ins. Co. 一 There is no prohibition against the use of parol evidence in interpreting contracts under California state law, no matter how thoroughly they appear to be integrated.

Mitchill v. Lath 一 An oral agreement may alter a written contract if it is a collateral agreement, it does not contradict express or implied provisions of the written contract, and it is one that parties would not ordinarily include in the written contract. An oral agreement may not alter a written contract if it is closely related to the subject of the written agreement.

Masterson v. Sine 一 Parol evidence may not be used to add to or alter the terms of an integrated agreement. To determine whether a written contract was an integration, meaning a complete and final embodiment of the terms, a court will consider whether the parties intended their writing to serve as the exclusive embodiment of the agreement. If an agreement is only partially integrated, parol evidence can be used to prove elements of the agreement that are not reduced to writing.

Luther Williams, Jr., Inc. v. Johnson 一 The parol evidence rule does not prevent a court from admitting testimony concerning an oral condition precedent. Parol testimony concerning an oral condition precedent is admissible when the contract is silent on the matter, the testimony does not contradict the writing, and it may be inferred under the circumstances that the parties did not intend the writing to encompass their entire agreement.

In re Soper’s Estate 一 When contract language is ambiguous not on its face, but when practically applied, parol evidence is admissible to determine the parties’ intent.

Conditions Precedent

If parties include a condition precedent in their agreement, the performance obligations to which the condition precedent applies will not become due until the condition precedent is satisfied.

Luttinger v. Rosen 一 A contract is not binding if a condition precedent, meaning a fact or event that the parties intend must exist or take place before performance, is not met.

Dove v. Rose Acre Farms, Inc. 一 An employer may not be obligated to perform under a bonus contract until the employee has satisfied all required conditions, even if those conditions seem especially strict.

Evans, Mechwart, Hambleton & Tilton, Inc. v. Triad Architects, Ltd. 一 A pay-when-paid provision operates only as a timing mechanism, while a pay-if-paid provision operates as a condition precedent that may discharge the duty to pay if the parties clearly intended to create such a condition precedent.

Definiteness

A contract may be unenforceable if a material term of the agreement is too indefinite. A contract will not fail for indefiniteness if the parties intended to make a contract, and there is a reasonably certain basis for giving an appropriate remedy.

Varney v. Ditmars 一 The words “fair” and “reasonable” may be definite enough to be enforceable, depending on the circumstances of the case, especially when they are used synonymously with “market value.” However, such words may be too indefinite to be enforceable when their meaning cannot be determined with a reasonable degree of certainty under the circumstances.

Community Design Corp. v. Antonell 一 An uncertain contract may nevertheless be enforceable when one party benefits from another party’s performance. A jury may properly determine the exact terms of such a contract.

Walker v. Keith 一 An agreement to agree, even in a renewal option, is not enforceable. Only option contracts that specify all the material terms with substantial certainty and leave nothing to be agreed upon in the future are enforceable.

Moonlenaar v. Co-Build Companies, Inc. 一 If a renewal clause leaves rent to be determined by a subsequent agreement, it is implied that the new rent will be “reasonable” or the “fair market” value, and is thus specific enough to be enforceable. Parol evidence may be used to explain the implicit term and show what the parties intended. There may be additional reason to enforce a renewal option when a party has already paid valuable consideration, such as higher rent.

Unconscionability

A contract may be unenforceable for unconscionability in certain circumstances. A court may consider such factors as the relevant bargaining power between the parties, their relationship, the ability of the accepting party to review and understand the contract before signing, and whether the terms unreasonably favored one party.

Williams v. Walker-Thomas Furniture Co. 一 Unconscionability, including an absence of meaningful choice on the part of one of the parties together with contract terms unreasonably favorable to the other party, may be a valid defense to the enforcement of a contract.

Vernon v. Qwest Communications Int’l, Inc. 一 In Colorado, a contract is unconscionable if it is both substantively and procedurally unconscionable. Relevant factors include unequal bargaining power, lack of opportunity to read the document before signing it, use of fine print, an absence of evidence that the provision was commercially reasonable, the terms of the contract, the relationship of the parties, and the circumstances surrounding the formation of the contract.

A contract may be rescinded when a mistaken belief related to a basic assumption of both parties materially affects the agreed performance. However, rescission may not be appropriate when the party challenging the contract has assumed the risk of loss related to a mistake.

Estate of Nelson v. Rice 一 A party bears the risk of mistake when they are aware at the time of contracting that they have only limited knowledge of the facts to which the mistake relates but treat such knowledge as sufficient. One who is consciously ignorant may be said to have assumed the risks associated with that ignorance.

Grenall v. United of Omaha Life Ins. Co. 一 A decedent’s unilateral mistaken belief that they were in good health when purchasing an annuity is not a valid basis to rescind the contract. The burden of such a risk is reasonable because it is an inherent part of a life annuity contract.

The Statute of Frauds

The statute of frauds provides that certain agreements are not enforceable without a written document signed by the party against whom enforcement is sought. Agreements that fall under the statute of frauds include contracts not performed within one year of the making of the contract, contracts for the sale of goods worth $500 or more, and contracts involving an interest in land.

Radke v. Brenon 一 A letter written to offer land for sale is sufficient to satisfy the Minnesota statute of frauds. Under the statute, a note or memorandum may be sufficient evidence to enforce an oral contract so long as the writing expresses consideration, is signed by the selling party or their lawful agent authorized in writing, and states expressly or by necessary implication the parties to the contract, the land involved, and the general terms and conditions of the sale. When all the evidence clearly indicates that an oral contract was made, a court may overlook technical requirements that would otherwise lead to an outcome contrary to the statute's purpose.

DF Activities Corp. v. Brown 一 There is an exception to the UCC's statute of frauds when the party against whom enforcement is sought admits in court that an oral contract for sale was made. However, once one party has submitted a sworn statement denying the existence of a contract, the other party cannot continue a lawsuit under the exception, hoping that the first party will perjure themselves.

McIntosh v. Murphy 一 A court has discretion to ignore the statute of frauds to avoid injustice, especially considering the doctrines of part performance and equitable estoppel.

Breach of Contract

Once a party breaches a contract, the other party has the right to sue for damages. If the breach is material, the party may have the right to suspend their own performance while pursuing damages. A breach is not material if there was substantial performance of the contract.

Kingston v. Preston 一 If a condition precedent is not met by one party, the other has no duty to perform, since their obligation to perform does not arise until the condition is satisfied.

Jacob & Youngs, Inc. v. Kent 一 Parties are obligated to fully perform under their contracts, but a trivial and innocent omission may sometimes be excused to the extent that damages may be limited to the difference in value between the performance bargained for and the actual performance, rather than the cost of replacement.

Anticipatory Repudiation

Anticipatory repudiation occurs when one party unequivocally manifests their intention not to perform their contractual obligations before they become due. Generally, an aggrieved party may await performance for a reasonable period of time or pursue a remedy for the breach.

Hochster v. De La Tour 一 Once a party repudiates their contractual obligations, the other party has the right to sue under the contract, even if performance has not yet become due.

Norcon Power Partners, L.P. v. Niagara Mohawk Power Corp. 一 If one party reasonably believes that the other will commit a breach by non-performance, they have the right to demand adequate assurance of future performance. This UCC principle is equally applicable under New York common law.

Excusing Conditions

Certain conditions may excuse a party from performing their contractual obligations. Under the doctrine of impossibility, a party may generally be excused from performance if performance becomes impossible or impracticable due to no fault of their own. Under the doctrine of frustration of purpose, a party may be excused from performance if their principal purpose for contracting is substantially frustrated by no fault of their own.

Acme Markets, Inc. v. Federal Armored Express, Inc. 一 If the non-occurrence of a condition would cause a disproportionate forfeiture, a court may excuse the non-occurrence so long as the condition was an immaterial part of the agreement. To determine whether a forfeiture is disproportionate, a court must weigh the extent of the obligee’s forfeiture against the importance of the risk against which the obligor sought to protect and the degree to which that protection would be lost if the non-occurrence was excused.

Alderman v. Davidson 一 A party’s waiver of their right to enforce one provision of a contract may waive their right to enforce another provision if their waiver intended such a consequence as indicated by their conduct. Even if the party did not intend to waive their right, they may be estopped if their conduct induced the other party into reasonably believing that strict compliance was not necessary.

Zwick v. Lodewijk Corp. 一 A clause in a lease providing that a lessor’s failure to act on any default does not waive the right to declare a default is not effective. A non-waiver provision may be considered evidence of non-waiver, but it itself can be waived. Additionally, the statute of frauds does not bar an oral modification to extend the time for performance, including payment.

Taylor v. Caldwell 一 Impossibility may excuse a borrower or bailee from returning a bailed item if performance becomes impossible because the item has perished, so long as the impossibility is not due to the fault of the borrower or bailee.

Hewitt v. Biscaro 一 Only a governmental order or promulgation of a governmental regulation rises to the level of an event that may excuse performance based on impracticability. A verbal instruction is insufficient. A party may not assert that a condition excuses them from performance if the attempt to avoid performance is not made in good faith and in accordance with fair dealing.

Route 6 Outparcels, LLC v. Ruby Tuesday, Inc. 一 When parties define the contours of a force majeure provision, such contours dictate its application, effect, and scope. A party may not use a force majeure clause to excuse their non-performance when they expressly limited the clause to events beyond the control of the non-performing party. While a global economic downturn is not within a party’s control, their decisions regarding how to cope with the downturn are.

Krell v. Henry 一 When a party’s purpose for contracting is frustrated by the non-occurrence of a condition, the occurrence of which was a basic assumption of the contract, the party’s duties may be discharged so long as the non-occurrence was not their fault.

Remedies for breach of contract protect each party’s expectation interests, reliance interests, and restitution interests. Parties often include liquidated damages provisions in their contracts, under which they agree on damages in event of a breach ahead of time. Parties are also entitled to limit available remedies by including provisions such as damages caps.

Carr-Gottstein Properties v. Benedict 一 A liquidated damages provision is valid when actual damages would be difficult to calculate, so long as the agreed amount is a reasonable forecast of likely damages and not so disproportionate an amount as to be punitive in nature.

O’Brian v. Langley School 一 A party opposing a liquidated damages provision may be entitled to conduct discovery to prove that the provision is an unenforceable penalty.

Nohe v. Roblyn Development Corp. 一 A court has discretion to compare the damages fixed in a liquidated damages provision to actual damages and choose not to enforce the liquidated damages provision if the difference between the provision and actual damages is unreasonable.

Ash Park, LLC v. Alexander & Bishop, Ltd. 一 When a contract for the sale of land is breached, a court has discretion to order specific performance, regardless of whether it is demonstrated that a legal remedy would be inadequate.

Reed Foundation, Inc. v. Franklin D. Roosevelt Four Freedoms Park, LLC 一 A court may order specific performance even if this would offend aesthetic considerations.

i.Lan Systems, Inc. v. Netscout Service Level Corp. 一 Specific performance may be appropriate when goods are unique or irreplaceable as a practical matter, but specific performance may not be appropriate when it is the contract itself that is unique, rather than the goods.

Grossinger Motorcorp, Inc. v. American National Bank and Trust Co. 一 A liquidated damages provision is only enforceable if the parties intended to agree to settle monetary damages in advance. Therefore, an optional liquidated damages clause is unenforceable because it shows that the parties did not have the necessary intent.

Groves v. John Wunder Co. 一 When a construction contract is breached, the correct measure of damages is the cost of remedying the defect, rather than the difference in value between the land as it was before the contract was made and the land as it would have been had the contract been performed.

Peevyhouse v. Garland Coal & Mining Co. 一 A breach of contract claim cannot give rise to a damages award so substantial that it results in economic waste. If a breach is merely incidental to the main purpose of the contract, and the economic benefit that would result from full performance would be grossly disproportionate to the cost of performance, damages may be limited to the diminution in value to the premises due to the non-performance.

Parker v. Twentieth Century-Fox Film Corp. 一 The measure of damages for wrongful discharge is the salary that the employee would have earned, minus the amount that the employer affirmatively proves that the employee has earned or with reasonable effort might have earned from other employment. However, the employer must show that the other employment was comparable or substantially similar to the job from which the employee was discharged.

R.R. Donnelley & Sons Co. v. Vanguard Transp. Systems, Inc. 一 A non-breaching party’s duty to mitigate damages is suspended when they reasonably rely upon the breaching party’s assurances that they would correct the issue. When reliance is not reasonable, a non-breaching party retains their duty to mitigate, even though the breaching party could conceivably cure the breach.

Hadley v. Baxendale 一 Damages for breach of contract may be any damages naturally arising from the breach or any damages that the parties could have reasonably contemplated at the time when the contract was made.

Manouchehri v. Heim 一 The measure of direct damages for breach of warranty is the difference between the value of the goods as warranted and the value of the goods actually delivered. This value may reasonably be approximated by the cost to repair the goods. In instances in which goods are irreparable or non-replaceable, a court may use other proper grounds to approximate the value.

This outline has been compiled by the Justia team for solely educational purposes and should not be treated as an independent source of legal authority or a summary of the current state of the law. Students should use this outline as a supplement rather than a substitute for course-specific outlines.

Last reviewed August 2023

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Breach of Contract

When any party to a contract, whether oral or written, fails to perform any of the contract’s terms, they may be found in breach of contract. While there are many ways to breach a contract, common failures include failure to deliver goods or services, failure to fully complete the job, failure to pay on time, or providing inferior goods or services. In other words, a breach of contract is a broken promise to do or provide something. To explore this concept, consider the following breach of contract definition.

Definition of Breach of Contract

• An unjustifiable failure to perform terms of a contract.
• A violation of contract through failure to perform, or through interference with the performance of the contractual obligations

What is Breach of Contract

Among the most common causes for lawsuits in the U.S., breach of contract occurs in many ways. The law offers a variety of remedies for each such breach, designed to make the injured party whole. Court-ordered remedies for breach of contract cases are not meant to punish the breaching party, but to return the injured party to the position he would be in if the breach had not occurred.

Partial Breach

A partial breach, or failure to perform or provide some immaterial provision of the contract, may allow the aggrieved party to sue, though only for “actual damages .” For example:

A homeowner hires a contractor to put a pond in his backyard, showing the contractor the black liner her would like installed under the sand. The contractor instead installs a blue liner of the same design and thickness, which is totally hidden from view. The contractor may have breached the precise terms of the contract, but the homeowner cannot ask that the contractor be ordered to take out the pond and start over with the black liner.

The homeowner could ask that the contractor be ordered to refund the difference in price between the requested black liner and the installed blue liner. In this case, because the color of the liner has no affect on functionality, and the price was basically the same, the difference in value, or “actual damages,” is zero.

Material Breach of Contract

Failure of one party to perform his obligations under the contract in such a way that the value of the contract is destroyed, exposes that party to liability for breach of contract damages. For example, if the contractor in the above example had used thin plastic not intended for the rigors of maintaining a pond, which could not be expected to last as long as the pond liner, the homeowner might recover the actual cost to correct the material breach, which would include removing the pond and replacing the liner.

A material breach of contract may relieve the aggrieved party of his own obligations under the contract, and give him the right to sue for damages. Such a total breakdown of the material provisions of a contract may be referred to as a “fundamental” or “repudiatory” breach.

Anticipatory Breach of Contract

Anticipatory breach, also known as “ anticipatory repudiation ,” occurs when one party to a contract stops acting in accordance with the contract, leading the other party to believe he has no intention of fulfilling his part of the agreement. In this case, the breaching party may give such an impression by his actions, or failure to act, such as failing to produce an ordered item, refusing to accept payment, or somehow making it obvious that he cannot or will not fulfill the terms of the contract. An anticipatory breach of contract enables the non-breaching party to end the contract and sue for breach of contract damages without waiting for the actual breach to occur. For example:

Jane agrees to sell her antique sewing machine to Amanda, and the two agree on the purchase price of $1,000, the sale to occur on May 1st. On April 25th, Amanda tells Jane that she cannot come up with the money on time. Following this communication, Jane can reasonably assume that Amanda is in anticipatory breach. This enables Jane to sell the sewing machine to someone else, or potentially file a lawsuit against Amanda for breach of contract.

Specific Performance

In certain cases, an aggrieved party may not be made whole through the award of monetary damages. He may instead request the court to order “ specific performance ” of the terms of the contract. Specific performance may be any court-ordered action, forcing the breaching party to perform or provide exactly what was agreed to in the contract. Specific performance is most often ordered in a contract involving something for which a value is difficult to determine, such as land or an unusual or rare item of personal property.

Example Breach of Contract Cases

Courts in the United States are virtually inundated with breach of contract cases. Small and large, the decisions in such cases shape the way American’s do business every day.

Revelations Perfume and Cosmetics Inc. v. Prince Rogers Nelson

In 2008, the Revelations Perfume and Cosmetics company sued the famous musician “Prince” and his music label, seeking $100,000 in damages for reneging on an agreement to help market their perfumes. The flamboyant pop star had promised to personally promote the company’s new perfume named after his 2006 album “3121,” and to allow his name and likeness to be used in the perfume’s packaging. Prince then refused to grant interviews related to the project, and refused to provide a current photograph for a press release.

In its breach of contract complaint , Revelations asked the court to award more than $3 million in lost profits, as well as punitive damages . The judge found no evidence , however, that the pop star acted with malicious intent, and ordered him to pay nearly $4 million for the cosmetics company’s out-of-pocket expenses. Revelations’ request for punitive and loss-of-profits damages was denied.

Macy’s v. Martha Stewart Living

Macy’s department stores filed a breach of contract complaint against Martha Stewart Living Omnimedia for making an agreement with J.C. Penney for the creation of Martha Steward retail stores within their retain stores beginning February 2013. Prior to the deal, J.C. Penney had purchased a minority stake in Steward’s company for $38.5 million. The mini-retail stores were to carry Martha Stewart home goods, however Macy’s argued they had been granted an exclusive right to make and sell certain Martha Steward Living products in an agreement signed in 2006.

Macy’s asked the court to grand a preliminary injunction to stop Steward from breaching the contract while the court considered the matter. Twelve years later, in June 2014, a New York judge ruled that J.C. Penney had indeed stepped over Macy’s contract with the domestic diva in its attempt to sell products bearing her name. While the J.C. Penney contract has been nullified, monetary breach of contract damages were not immediately decided, and may be limited to the legal fees and costs of the lawsuit, as the judge decided the case did not warrant punitive damages.

Breach of Contract Elements

To be successful in a breach of contract lawsuit, there are certain breach of contract elements that must exist:

Existence of a Valid Contract

To claim breach of contract, there must be an actual, valid contract in place. It is not necessary for a contract to be put in writing, as oral contracts are enforceable by the court system. To prove the existence of a valid contract, however, three elements must be established:

• Offer – Some discussion and an agreement to the provision of goods or services in exchange for something of value must have been made. There must have been the intention to enter into an agreement or contract.
• Acceptance – An agreement to the essential terms for the exchange of goods or services for something of value must be entered into. Written contracts make proving such terms easier, as they document specific terms to which the parties have agreed.
• Consideration – Each party to an oral or written contract must have received something of value. In other words, in a valid contract, each party has something to gain. A promise by one party to provide a good or service without receiving anything in return looks a great deal like a gift, which is not enforceable.

In addition, an agreement written to cover the provision of goods or services that occurred in the past is a not valid contract. A contract must be entered into before the exchange takes place, to show there was an agreement, or “meeting of the minds.”

Breach of the Terms of the Contract

Strictly speaking, a breach of contract occurs if any of the terms are broken. Not every term is taken literally, however. To warrant the filing of a lawsuit, a breach of the terms of the contract must actually detract from the value of the contract, being considered a “material breach.” Alternatively, the breach of contract must change the outcome of the agreement in such a fundamental way, that the aggrieved party has the right to terminate the contract (a “fundamental breach”).

Actual Damages or Loss

To be successful in a breach of contract lawsuit, the aggrieved party must prove that they have suffered some type of loss or damages as a result of the breach. Actual damages or loss may be in the form of money lost, time lost, loss of opportunity, or a host of other losses.

Breach of Contract Damages

Generally speaking, the amount of monetary damages a party can recover in a breach of contract case is the amount it would take to make them whole. For instance, the actual monetary value of the goods or services that were to be provided. In a case where a monetary award would not make the aggrieved party whole, an order for specific performance might be made. Alternatively, the aggrieved party can ask the judge to cancel or void the contract, restoring them to the position they were in before entering into the contract.

In the rare breach of contract lawsuit where the aggrieved party can prove that the breach was an intentional attempt to mislead or defraud, the court may order the breaching party to pay an additional monetary sum as “punitive damages.” In any award of damages for breach of contract, the court is likely to order the breaching party to pay the legal fees and expenses of the aggrieved party.

Filing a Breach of Contract Complaint

A party to a contract dispute who feels the other party is in breach of the contract, should provide a breach of contract letter to the breaching party that he will be taking action for breach of contract. This is the first, formal step to resolving the issue. Sending a dated breach of contract letter outlining the problem puts the other party on notice they need to do something to comply with their part of the agreement.

If it becomes necessary to file a lawsuit, providing a copy of the letter, and all correspondence with the opposing party, to the court helps prove the case. While many people choose to file their breach of contract complaint in Small Claims Court, those involved in high-value contract disputes should consult an attorney experienced in contract cases.

Related Legal Terms and Issues

• Actual Damages – Money awarded to compensate someone for actual monetary or property losses. Also referred to as “ compensatory damages ,” the amount of money awarded is based on the proven loss, injury, or harm proven by the plaintiff .
• Punitive Damages – Money awarded to the injured party above and beyond their actual damages. Punitive damages may be awarded in cases where the defendant ’s actions in regard to the case are malicious, or so reckless as to give a reasonable person pause. Punitive damages, also referred to as “exemplary damages,” are ordered for the purpose of punishing the wrongdoer for outrageous misconduct in a civil matter.
• Specific Performance – An equitable remedy in which the court compels a party to a contract to perform duties agreed to in the contract.

KSV Advisory Canada’s Leading Boutique Advisory, Restructuring and Valuations Firm.

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We were retained by the plaintiff, a law firm, to quantify lost profits following the termination of its contract for collection services with a Schedule A bank.

We calculated the balance owing to the law firm based on the historical collection pattern and projected collections for approximately 35,000 outstanding matters. Our report was used as evidence to support our client’s claim based on its legal interpretation of the termination provisions agreement.

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What Is a Breach of Contract?

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How to Avoid a Breach of Contract

Damages and legal remedies, economics of a breach of contract.

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Breach of Contract Explained: Types and Consequences

Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

Investopedia / Ellen Lindner

A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach could be anything from a late payment to a more serious violation, such as the failure to deliver a promised asset .

A contract is binding and will hold weight if taken to court. If it can be proved that a contract was breached, the remedy would generally be to give the victim what they were initially promised. A breach of contract is not considered a crime or even a tort, and punitive damages are rarely awarded for failing to perform promised obligations.

Key Takeaways

• A breach of contract occurs when one party in a binding agreement fails to deliver according to the terms of the agreement.
• A breach of contract can happen in both a written contract and an oral contract.
• The parties involved in a breach of contract may resolve the issue among themselves or in a court of law.
• There are different types of contract breaches, including a minor or material breach and an actual or anticipatory breach.
• A breach of contract is not considered a crime or even tort and rarely results in extra monetary compensation.

Understanding a Breach of Contract

A breach of contract is when one party breaks the terms of an agreement between two or more parties. This includes when an obligation that is stated in the contract is not completed on time—for example, you are late with a rent payment—or when it is not fulfilled at all, such as a tenant vacating their apartment owing six months’ back rent.

Sometimes the process for dealing with a breach of contract is written in the original contract. For example, a contract may state that, in the event of late payment, the offender must pay a $25 fee along with the missed payment. If the consequences for a specific violation are not included in the contract, then the parties involved may settle the situation among themselves, which could lead to a new contract, adjudication , or another type of resolution.

Types of Contract Breaches

One may think of a contract breach as either minor or material.

• Minor breach : A minor breach happens when you don’t receive an item or service by the due date. For example, you bring a suit to your tailor to be custom fit. The tailor promises (an oral contract) that they will deliver the adjusted garment in time for your important presentation but, in fact, they deliver it a day later.
• Material breach : A material breach is when you receive something different from what was stated in the agreement. Say, for example, that your firm contracts with a vendor to deliver 200 copies of a bound manual for an auto industry conference. But when the boxes arrive at the conference site, they contain gardening brochures instead.

Further, a breach of contract generally falls under one of two categories:

• Actual breach : When one party refuses to fully perform the terms of the contract.
• Anticipatory breach : When a party states in advance that they will not be delivering on the terms of the contract.

Legal Issues Concerning a Breach of Contract

A plaintiff, the person who brings a lawsuit to court claiming that there has been a breach of contract, must first establish that a contract existed between the parties. The plaintiff also must demonstrate how the defendant—the one against whom a claim or charge is brought in a court—failed to meet the requirements of the contract.

Is the Contract Valid?

The simplest way to prove that a contract exists is to have a written document that is signed by both parties. It’s also possible to enforce an oral contract , though certain types of agreements still would require a written contract to carry any legal weight. These kinds of contracts include the sale of goods for more than $500, the sale or transfer of land, and contracts that remain in effect for more than one year after the date when the parties sign the agreement.

Courts will review the responsibilities of each party of the contract to determine whether they have fulfilled their obligations. Courts also will examine the contract to see if it contains any modifications that could have triggered the alleged breach. Typically, the plaintiff must notify a defendant that they are in breach of contract before advancing to legal proceedings.

Possible Reasons for the Breach

The court will assess whether or not there was a legal reason for the breach. For example, the defendant might claim that the contract was fraudulent because the plaintiff either misrepresented or concealed material facts.

The defendant could alternatively argue that the contract was signed under duress, adding that the plaintiff compelled them to sign the agreement by applying threats or using physical force. In other cases, there might have been errors made by both the plaintiff and the defendant that contributed to the breach.

To avoid a breach of contract lawsuit, you should check any contract you sign for three things.

• Clarity : The language of the contract should be clear and precise. If the other party is not a native speaker of the language the contract is in, it may be worthwhile to hire an interpreter to ensure that everyone understands their roles and expectations under the contract.
• Expectations : You and any other parties signing the contract should understand the expectations it outlines and already know that you are able to fulfill them. Your ability to meet those expectations should not rely on future amendments because those may not happen.
• Legality : In order to be binding, your contract needs to be legal where it is signed. If you are not sure, work with a lawyer who specializes in contract law before anyone commits to signing.

You can also avoid breach of contract lawsuits by carefully selecting the people or companies that you work with. Take time to research their professional reputations and legal history. If they have previously been involved in breach of contract lawsuits, you may not wish to do business with them.

Generally speaking, the goal of contract law is to ensure that anyone who is wronged is basically left in the same economic position that they would have been in had no breach occurred. A breach of contract is not considered a crime or even a tort, and punitive damages are rarely awarded for failing to perform promised obligations, with payouts limited to the figures listed in the contract.

For example, if you completed a job for which a contract stated you would get paid $50,000, but you only got $20,000, you could be awarded damages of $30,000.

Normally, a party whose contract was breached cannot claim more than the money they were initially owed—as laid out in the contract.

However, the doctrine of reliance damages does offer some exceptions in very specific circumstances. Additional monetary damages may be awarded if it can be proved that a reliance on the contract being fulfilled triggered other connected expenses, such as lifeguard equipment being bought based on the assumption laid out in the contract that a pool would be built.

In such cases, those harmed will be rewarded extra damages only if they did their best to get themselves out of that unfavorable situation—such as, in the example above, by selling the lifeguard equipment.

Economically, the costs and benefits of upholding a contract or breaching it determine whether either or both parties have an economic incentive to breach the contract. If the net expected cost to a party of breaching a contract is less than the expected cost of fulfilling it, then that party has an economic incentive to breach the contract. Conversely, if the cost of fulfilling the contract is less than the cost of breaking it, it makes sense to respect it.

Furthermore, when the expected cost to each party of following through with a contract is greater than the expected benefit, both parties have an incentive to forgo the transaction in the first place or mutually agree to void the contract. This may occur when relevant market or other conditions change over the course of the contract. 

Example of a Mutually Beneficial Breach of Contract

A farmer agrees in the spring to sell grapes to a winery in the fall, but over the summer, the price of grape jelly rises and the price of wine falls. The winery can no longer afford to take the grapes at the agreed price, and the grape farmer could receive a higher price by selling to a jelly factory. In this case, it may be in the interest of both the farmer and the winery to breach the contract. 

If the parties were to uphold the contract, the farmer would miss out on an opportunity to sell at higher prices and the winemaker would suffer by paying more than it can afford to, given what it would receive for the resulting wine at the new market price . Consumers would also be punished; the change in relative prices for grape jelly and wine signal that consumers want more jelly and less wine. 

Economists recognize that upholding this contract (making more wine and less jelly, contrary to consumer demand ) would be economically inefficient for society as a whole. Breaching this contract, therefore, would be in the interests of everyone: the farmer, the winemaker, the jelly maker, and the consumers. 

Societal Effects of Breach of Contract

It could also be the case that a breach of contract is in the interest of society as a whole, even if it may not be favorable to all of the parties in the contract. If the total net cost of breaching a contract to all parties is less than the net cost to all parties of upholding the contract, then it can be economically efficient to breach the contract, even if that results in one (or more) parties to the contract being harmed and left worse off economically.

This is an example of what economists call Kaldor-Hicks Efficiency: If the gains to the winner from breaching the contract outweigh the losses to the loser, then society as a whole can be made better off by breaching the contract.

What Is Considered a Breach of Contract?

A breach of contract occurs when one party fails to fulfill its obligations as outlined in the contract. That could include something relatively minor, such as being a couple of days late on a payment, or something more serious.

Can I Sue for Breach of Contract?

If you have a contract with another person or entity and they fail to fulfill the contract as agreed, you can file a lawsuit to recover any damages that you lost as a result. Before filing a lawsuit, though, you will want to speak with a lawyer who specializes in contracts to ensure that your case has a possibility of success.

Is Breaching a Contract a Crime?

Breaching a contract is generally not considered a criminal offense unless it involves something like fraud. It is considered a matter between private parties, rather than something that affects society as a whole.

What Are the Consequences of Breaching a Contract?

That depends. Generally speaking, if it can be proved that there was a contract and that it was breached, then the party wronged should be left in the same economic position that they would have been in had no breach occurred.

What Is the Most Often Awarded for Breach of Contract?

If you successfully take someone to court for breach of contract, the most common remedy is compensatory damages. Usually, a court will order the person who breached the contract to pay you enough money that you can go elsewhere to get the services they failed to provide.

Contracts are specifically designed to be upheld and to give all parties to the agreement peace of mind. However, there are cases when they are breached, and a solution must be found to remedy a failure to perform promised obligations.

While not strictly a crime, a contract is there to be honored—unless all parties agree to renege on it—and it is not particularly easy to wriggle out of one. The punishment for breaching may be already outlined in the contract itself. Alternatively, a resolution might need to be found, which can result in the breacher being forced to abide by its original commitment.

Stanford Law School, The Center for Internet and Society. “ Why Breach of Contract Should Never Be a Crime .”

Cornell Law School, Legal Information Institute. “ Breach of Contract .”

NYU School of Law. “ A Principle of Justified Promise-Breaking and Its Application to Contract Law .”

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The key English contract law cases of 2020

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It has been a most unusual year. In response to the global pandemic, the Cabinet Office issued Guidance in the summer, encouraging contractual parties to act “responsibly and fairly” in the performance and enforcement of their contracts.

In a similar vein, the British Institute of International and Comparative Law (“ BIICL ”) has published three Concept Notes, the first of which noted that a plethora of disputes from the pandemic would be destructive to good contractual outcomes and the effective operation of markets. However, the BIICL also recognised that there are some cases which do require the involvement of the courts.

Inevitably then, there have been disputes which have made it to the courts this year: some which started before the pandemic hit; some borne of the pandemic itself (notably, the recent insurance business interruption case, which you can read about here   1 , and a case concerning material adverse effect clauses, which you can read about here ); and others that presumably just could not be resolved consensually. What can we learn from the decisions in these disputes? In this briefing we review this year’s important contract cases and consider what commercial parties can learn from them.

1. At the time of writing, we note that the Supreme Court heard a leapfrog appeal from the decision of the High Court from 16-19 November 2020. The judgment is pending.

Implied duties of good faith: plead at your peril.

Last year we noted that the law was still in a state of flux. One year on, is it any clearer when a contract will be subject to an implied duty of good faith? It’s fair to say the law still “has not yet reached a stage of settled clarity” ( Cathay Pacific Airways Ltd v Lufthansa [2020] EWHC 1789 ) with a continuing split between the two visions of this duty, namely:

• that there is a class of “relational contracts” that are subject to a duty of good faith as a matter of law ( Essex County Council v UBB Waste (Essex) Ltd [2020] EWHC 1581 ), or
• that such a duty will only arise where the strict tests for the implication of terms in fact are satisfied ( Taqa Bratani Ltd & Ors v Rockrose UKCS8 LLC [2020] EWHC 58 ).

Around these central themes, there have been various clarifications to the law. For example, in Morley v Royal Bank of Scotland Plc [2020] EWHC 88 (Ch) the High Court rejected a borrower’s argument that the bank had an implied duty to act in good faith towards it under a loan agreement. The Court held that this was not a relational contract of any kind but an ordinary loan facility agreement. The bank’s decision to call in the loan was the exercise of a contractual right, not a discretion (subject to the Braganza duty). The bank’s power to obtain a revaluation of the charged assets and its power to charge a default interest rate were discretions which had to be exercised for purposes connected to the bank’s commercial interests and not so as to vex the borrower maliciously (following Property Alliance Group Ltd v Royal Bank of Scotland plc [2018] EWCA Civ 355 ). On the facts, they had been exercised properly.

Similarly, the courts continue to treat references to good faith in some clauses as evidence that a wider overarching duty of good faith should not be implied into the agreement (see Russell v Cartwright [2020] EWHC 41 (Ch) ).

Perhaps most important is the nature of any duty of good faith. While this is sometimes described in broad terms, for example to “adhere to the spirit of the contract, to observe reasonable commercial standards of fair dealing, to be faithful to the agreed common purpose, and to act consistently with the justified expectations of [the other party]” ( CPC Group Ltd v Qatari Diar Real Estate Investment Company [2010] EWHC 1535 ), the courts have recently made it very clear that the assertion that a party has not acted in good faith is a serious allegation.

In Essex County Council v UBB Waste (No. 3) [2020] EWHC 2387 (TCC) the courts suggested this was, put colloquially, an allegation of “sharp practice” . To make such an allegation without proper foundation was out of the norm and justified an order for costs on an indemnity basis.

What does this mean for you?

Good faith is still an evolving area in English law. Until we have greater clarity, it is worth considering whether your contract might be classified as “relational” or whether a duty of good faith might arise under the rules for the implication of terms in fact. In either case, you might want to address the matter expressly. Finally, allegations of a breach of good faith are serious and should not be made without foundation, so plead at your peril.

Excusing liability

In times of crisis, contractual parties may have even greater reason to examine those parts of their contracts which may exclude or limit liability or offer defences to breach (such as force majeure provisions).

Force majeure and a variety of limitations

A recent dispute concerning the 2011 riots in London put all of these provisions under the spotlight. The High Court found that a warehouse operator had failed to use reasonable skill and care to protect the contents of the warehouse (CDs and DVDs), which were destroyed by fire during the riots. Could the operator rely on any contractual terms to excuse or limit its liability?

It was not able to rely on the force majeure clause since the fire was not a circumstance “beyond [its] reasonable control” . The Court found that, if it had acted reasonably, it could and should have prevented the fire.

Since the claims (for loss of profits, business interruption costs and increased cost of working, suffered as a result of the fire) were all direct (in that they were exactly the type of loss that one would expect to result from the breach), the clause excluding liability for “indirect and consequential loss” did not apply. A cap on liability for damage to goods was no protection either as the claims were not for damage to the goods themselves. However, an overall – aggregate – cap on all liability (of £5 million) was effective.

What does this mean for you? These types of clauses are very topical in the current uncertain times and always need to be drafted carefully. This case reminds us that the position of commercial parties will depend upon the exact terms of the contracts, applied to the facts of the situation.

Where can you read more? See 2 Entertain Video Ltd & Ors v Sony DADC Europe Ltd [2020] EWHC 972 (TCC) .

Indirect and consequential loss

Another recent case highlights just how useful an exclusion of “indirect and consequential loss” could have been, if only it had been included.

A contractor terminated a construction contract for breach by its employer (on the basis that the latter had failed to provide a prepared site for the water treatment plant that was to be built). The Board of the Privy Council held that the contractor was entitled to recover, as damages for breach, the loss of profits that it would have made under an operation and maintenance contract for the same plant had it been built. These losses were not too remote (and fell within the second limb of Hadley v Baxendale [1854] EWHC Exch J70) as they were within the reasonable contemplation of the parties to the construction contract when that contract was entered into (on the same day as the operation and maintenance agreement).

What does this mean for you?  When entering into related contracts, it is vital to consider the exact relationship between them, including the consequences of a termination, breach or force majeure scenario arising under one of them and the knock-on effects this might have. Exclusion of liability under a related contract might be achieved by an exclusion of indirect and consequential loss (depending upon the specific drafting) or expressly.

Where can you read more? See AG of the Virgin Islands v GWA [2020] UKPC 18 . 

Loss of goodwill

It is also relatively common to see clauses exclude liability for “loss of goodwill”. The Court of Appeal decided that, in a commercial context, the ordinary legal meaning of “goodwill” was the good name and public reputation of the business concerned. If a contract intends the term to have an unusual or technical meaning (such as the accounting concept of goodwill) then that should be spelt out expressly.

This decision highlights how important it is to agree the meaning of (and clearly define) terms in agreements, particularly where something different from the ordinary legal meaning is intended.

Where can you read more? See Primus International v Triumph Controls [2020] EWCA Civ 1228 .

What is a reasonable condition of consent (and what is not)?

In a recent decision, the High Court considered the case law on contractual consent provisions, which often state that one party “shall not unreasonably withhold consent” to whatever is being requested.

If we call the party asking for consent, Party A; and the party being asked to give consent, Party B, the Court found that the authorities drew the following distinction:

• while it may be legitimate for Party B to impose a condition to protect or compensate it for the impairment of a benefit it enjoys under the contract which would result from giving consent,
• that is completely different to imposing a condition which would impair a right which Party A currently enjoys under the contract.

The contract was for the onshore pipeline transportation of hydrocarbons produced in the North Sea. The producer (Party A in our analogy) requested consent to amend its estimated production profile for transportation for the period from January 2021 to December 2040. The pipeline owner (Party B) stated that it was only willing to consent to the amendment if Party A agreed to an increase in the tariff payable under the agreement. Contractually, Party B was not entitled to “unreasonably withhold” its consent to the amendment. Was Party B therefore acting contractually or non-contractually by seeking to impose a tariff rise as a condition to giving consent?

The Court found that Party A was both entitled and obliged to tender its hydrocarbons for transportation at the contractual tariff for the duration of the agreement, which would continue until terminated on one of the contractual bases set out in the agreement. The terms did not limit that entitlement and obligation to the period up to 2020. In those circumstances, it would be inconsistent with the terms and scheme of the agreement if Party B was entitled to make its consent to the amendment conditional on a fundamental revision of the parties’ bargain in the form of a new tariff. Party B was acting non-contractually.

This decision clarifies that a condition might be reasonable as a prerequisite to giving consent (e.g. to make up for something lost by the consenting party as a result of the change). However, a party cannot use a consent request as an opportunity to renegotiate terms or impose an unrelated change on the other party. It may be preferable to make this clear in the drafting of any relevant provision, by stating that consent cannot be unreasonably withheld or delayed, or made subject to additional conditions.

Where can you read more? See Apache North Sea v INEOS FPS Limited [2020] EWHC 2081 (Comm) .

How will the Courts determine the law applicable to an arbitration clause?

The Supreme Court recently provided the answer to this question in a landmark decision.

An arbitration clause is generally regarded as legally distinct from the main agreement in which it is contained (and the Rome I Regulation excludes arbitration and choice of court clauses from its scope). In England, therefore, common law conflict of laws rules apply to determine the law applicable to the arbitration agreement. Under those rules that will be: (i) the law expressly or impliedly chosen by the parties; or (ii) in the absence of such choice, the law “most closely connected” to the arbitration agreement.

Where the parties have not specified the law applicable to the arbitration agreement, but they have chosen the law to govern the contract as a whole, this choice will generally also apply to the arbitration agreement, rather than the law of the seat of the arbitration (as the Court of Appeal had held). But where the parties have made no choice of law to govern the arbitration agreement, either specifically or by choosing the governing law of the contract, the closest connection test will, in general, lead to the arbitration agreement being governed by the law of the seat of arbitration.

The potential for issues regarding what the applicable law of an arbitration clause is arise most frequently where the law governing the main contract and the place of the seat do not “match”. To remove the room for debate, parties, where the seat of arbitration is in England and the law of the contract is not English, therefore frequently consider using an express choice of law to govern the arbitration clause. Often, this is in favour of the law governing the main contract (the benefits of consistency with that law being something touched upon by the Supreme Court in its judgment). That approach should not change. The Supreme Court’s clarification of this area is welcome but is a general interpretative approach. Therefore, in such cases, an express designation still carries the value of some increased certainty (it will, of course, always be necessary to ensure the clause is properly drafted and works under the chosen law).

Where can you read more? See Enka Insaat Ve Sanayi AS (Respondent) v OOO Insurance Company Chubb (Appellant) [2020] UKSC 38 , and, for our ArbitrationLinks coverage see here .

What stays and what goes in assignment and novation?

The High Court held that an assignment by a contractor to an employer of “ the subcontract ” was an assignment of both (a) accrued rights, and (b) future rights under the subcontract. This meant that when the employer claimed damages in the sum of £133 million from the contractor, the contractor was left without a contractual right to seek a direct remedy from the subcontractor (in principle, it would be able to claim contribution from the subcontractor under the Civil Liability (Contribution) Act 1978, but this would have to be considered, alongside the effect of any relevant limitation or exclusion provisions, at full trial). The Court also held that the assignment did not amount to a novation, so that the contractor’s obligations under the subcontract had not been transferred to the employer.

It’s imperative to think – in advance and before agreeing to do so – what the possible effects of a transfer of rights might be, so that you are not left without a clear remedy, should that be needed. The decision also contains a handy summary of some of the key aspects of assignment and novation:

Assignment:

• Subject to any express restrictions, a party to a contract can assign the benefit of a contract without the consent of the other party to the contract.
• The burden of a contract (the obligations under it) cannot be assigned but the principle of conditional benefit can apply so as to impose on the contractual assignee a positive obligation where such obligation is inextricably linked to the benefit assigned.
• In the absence of any clear contrary intention, reference to assignment of the contract by the parties is understood to mean assignment of the benefit of both accrued and future rights.
• It is possible to assign future rights only, but clear words are needed for that.
• Novation occurs when the original contract between A and B is extinguished and replaced by the creation of a new contract between A and C.
• Novation requires the consent of all parties to the original and new contract. Consent can be given in the original contract, but clear words are needed.
• The terms of the new contract must be sufficiently certain to be enforceable.
• In every case the court must construe the contractual arrangements to give effect to the expressed intentions of the parties, using the established rules of construction.

Where can you read more? See Energy Works (Hull) Limited v MW High Tech Projects UK Limited and another [2020] EWHC 2537 (TCC) .

Notices: the devil in the detail

A share purchase agreement provided that the sellers would pay the buyer an amount equal to any tax liability which arose in certain circumstances, provided that, when making a claim, the buyer provided written notice stating “ in reasonable detail ” the matter which gave rise to the claim, the nature of such claim and (so far as reasonably practical) the amount claimed. The buyer gave notice of a claim to the sellers, referring to an investigation begun by the relevant tax authorities and gave a chronology of key milestones. Was this enough?

The High Court noted that the “reasonable detail” requirement amounted to an obligation to provide sufficient information so that the sellers, acting reasonably, knew what matter gave rise to the claim as well as the nature of the claim and, if reasonably practical, the amount. On the facts, the notice was insufficient. It contained no indication of the relevant facts, events or circumstances giving rise to the claim. Reference to the tax investigation was insufficient, and did not import all the tax authority’s comments and allegations, even if they were known to the sellers’ representatives. There had to be some indication of how the claim arose out of the facts identified.

Requirements to provide details usually mean that more, rather than less, should be included. It might help to consider what the purpose of the notification is and what it is that the recipient will need to know in order to respond or take a matter forward.

Where can you read more? See Dodika Ltd & Ors v United Luck Group Holdings [2020] EWHC 2101 (Comm) .

Waiver by election: understanding the boundaries

Rights can sometimes be lost by waiver by election: where a party has alternative, inconsistent rights, has knowledge of the facts which give rise to them and acts in a way which is only consistent with its having chosen to rely on one of them, it will be taken to have waived the other right ( Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 ). This explains why a party who communicates unequivocally an intention to continue with performance thereby loses the right to terminate a contract (instead, it is taken to have affirmed the contract).

A recent decision of the Privy Council is an important, and topical, illustration of the boundaries of the concept of waiver by election and highlights that it isn’t always applicable.

The parties entered into a fuel supply agreement against the backdrop of a potential closure of a refinery which supplied petroleum to the seller. The seller had a specific contractual right in a “Performance Relief” clause (effectively, a force majeure clause) to withhold, reduce or suspend deliveries to the extent it thought fit where necessitated by, amongst other things, the closure of the refinery.

When the refinery gave notice to the seller that it was closing, the seller notified the buyer but carried on supplying fuel, purchased and shipped from elsewhere while negotiations took place between the parties (as the seller sought a price increase to offset its higher costs). When these negotiations broke down, the seller sought to rely on the clause. The buyer argued that the seller’s rights had been “exhausted” after the seller had continued making deliveries. The Board of the Privy Council disagreed: waiver by election did not apply here. The seller’s right to claim performance relief did not present the seller with a binary, all-or-nothing choice between, on the one hand, putting an end to all the parties’ obligations or, on the other hand, treating all those obligations as still binding. Instead, it had a range of options: at one end of the scale, the seller might merely delay a delivery of fuel; at the other extreme, the seller might decide to cease all further deliveries under the contract, as eventually happened.

In situations where a party is faced with deciding whether to exercise a contractual right or not, whether taking one course of action will constitute a “waiver” of its other right(s) will ultimately turn on whether the rights are truly inconsistent with each other. Parties who want to make it clear that any action they are taking is to be without prejudice to their other rights should say so expressly, in writing. It should also be kept in mind that in these types of situations, estoppel can be relevant  – for example, if the seller had unequivocally represented it would not withhold deliveries under the supply agreement despite the closure of the refinery, it might have lost its right to performance relief by waiver by estoppel. There was no argument, however, that this was so in this case.

Where can you read more? See Delta Petroleum v BVI Electricity Corporation [2020] UKPC 23 .

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Top 5 Famous Breach of Contract Cases You Need To Know

Ever heard of a breach of contract before? Do you know some of the most popular and famous breaches of contract cases in the United States and the United Kingdom? How serious is a breach of contract lawsuit? Can you go to jail for breaching a contract? Are there some good examples of contract breaches in the United States? Before going into any partnership deal with anyone, it’s important you what the consequences of breaching a contract are, what you need to prove a breach of contract and how to manage data breaches .

Definition of Breach of Contract

Table of Contents

What is a breach of contract? Breach of contract is a legal cause of action when an agreement binding two or more parties is not honored by one or more parties. This is often a case when a party’s performance is impacted by the non-performance of other parties or interference from them.

If there is a breach of contract, the party accused of breaching the contract will pay for the resulting damages the breach caused to the party on the receiving end of the contract breached. A smart way to never get into trouble is to do the right thing always and listen to your attorney.

When an employee of yours is eligible for workers’ compensation insurance and you don’t pay it, you have breached an employment contract and you might likely get sued. Here are some other reasons that can make an employee to sue you .

There are situations where it could be an anticipatory breach of contract. An anticipatory breach of contract is an action that shows one party’s intention to fail to fulfill its contractual obligations to another party.

You might want to file an anticipatory breach of contract case when you notice the following:

• One party’s unwillingness to accept payment.
• One party’s failure to produce a certain item or get the right team onboard the project both of you are working together on.
• An obvious indication of his or her intent not to fulfill the agreement’s terms.

In most states in the United States, especially Colorado, a party attempting to recover on a claim for breach of contract must prove the following elements:

• The existence of a contract
• Substantial performance by the plaintiff or some justification for nonperformance
• Failure to perform the contract by the defendant
• Resulting damages to the plaintiff

These 4 elements above are the things you will need to prove a breach of contract. This not only applies in the U.S. alone but also in the UK, Australia, Canada, and most European countries. This piece of information will be helpful to new startups and founders in Europe .

This article reveals a list of five (5) breach of contract cases in the United States of America in the past few years.

Famous Breach of Contract Cases

Here are some of the most famous breach of contract cases and examples in the United States:

1. Apple and Gerard Williams

Apple sued its former chief architect, Gerard Williams, for breach of contract on the grounds he started his own chip-design company while he was still staff at Apple.

Gerard Williams was in charge of designing the iPhone and iPad microprocessors. Williams began working with Apple in 2010 and Apple claims he began working on his own chip-design company, Nuvia while working at Apple.

Part of Apple’s lawsuit argues that Williams used some of its employees to set up Nuvia. 

Apple said “Rather than exploiting the technology he was working on for Apple, Gerard Williams secretly considered how he could take an opportunity to exploit that technology from Apple. By 2018, Williams had started his new venture on Apple’s dime.”

Gerard Williams created Apple’s A7 processor which was used in the iPhone 5s model and the A12x chip used in iPads. 

Apple sought unspecified damages claiming Williams’s actions amounted to a breach of duty and loyalty. 

Williams countered the lawsuit from Apple claiming that his contract with the electronic giant had incomplete clauses that violated the California state law.

Related:  Contract Breach: Types and How Startups Can Report

2. Netflix and Relativity Media 

In 2018, Netflix filed a complaint against Relativity Media wherein they accused the studio of infringing the terms agreed upon in its multi-year contract. The multi-year contract between Netflix and Relativity Media was supposed to be exclusive content to the streaming service.

Netflix filed a breach of contract claim because five (5) films from Relativity Media which were exclusively licensed to the streaming service were shown on other platforms such as Amazon and Starz.

Are you wondering what the punishment for this breach of contract was? Oh yes, Relativity Media was asked to pay the sum of $9.6 million dollars as a refund for distributing The Lazarus Effect, The Woman In Black 2, Angel of Death and Beyond the Lights. Additionally, they were asked to pay $2.9 million for licensing two movies: And So It Goes, and Hector and the Search For Happiness to Starz.

In response to the lawsuit filed against them, Relativity Media claims the events happened inadvertently.

3. Gilead and the US Government

Gilead Science, Inc. filed a breach of contract lawsuit against the government of the United States of America in the court of Federal claims. It was a popular breach of contract case back then in the United States.

In the lawsuit, Gilead Sciences alleged that the United States Centre for Disease Control and Prevention (CDC) violated four Material Transfer Agreements (MTAs) and a Clinical Trial Agreement (CTA).

The claims filed against the US Centre for Disease Control and Prevention states that the collaboration spanned for 15 years. By the MTAs and CTA contract, Gilead was to give the CDC significant quantities of antiretroviral agents free of charge for research.

The US Centre for Disease Control and Prevention was supposed to notify Gilead if the research produced any discovery, innovation, or ideas.

The terms of CTA prohibited the government agency from seeking patents in connection to inventions developed from the drugs the Pharmaceuticals were offering. The lawsuit filing came on the heels of obvious infringements on the provisions of the MTAs and CTA contracts by the state.

Related:  5 Business Litigation Facts You Probably Never Heard Of

4. Amazon Studios and Woody Allen

Woody Allen was accused of raping his adopted daughter, an event that sent the media world into a frenzy.

Before the allegations of rape leveled against Allen surfaced, he and Amazon studios had a four-picture movie deal in place. This deal was ended immediately after the news of Allen’s rape scandal came up.

Dylan Farrow, Woody Allen’s adopted daughter, was believed to have been raped by the movie director and Amazon filed for a contract breach.

At the time of canceling their deal, Amazon Studios owed Allen the sum of USD 68 million in guaranteed payment. Amazon also canceled the release of Allen’s movie “A Rainy Day in New York” in 2018.

A Federal High Court in New York City dismissed the legal action. The case dismissal was termed “voluntarily dismissed with prejudice”. This means both Woody Allen and Amazon studios agreed to end the lawsuit and in doing so would never return to court again over the issues already resolved.

5. Patterson-Stevens Inc. and State 

The officials of Jamestown, Virginia who hired Patterson-Stevens Inc. of Tonawanda were dragged to court on claims of a contract breach. It’s one of those popular breaches of contract cases that are hardly talked about.

Patterson-Stevens were given a contract by the state to renovate the Tracy Plaza and according to the company, they suffered monetary damages to the tune of $306,048. 

They breached contract terms when they delayed the commencement of the renovation work, issued a stop-work order, interfered with Patterson-Stevens’ performance of the contract, improperly withheld payment, failed to pay or rejected the invoice and delayed the completion of the contract long after the date of completion had passed.

Patterson filed the lawsuit against the state in State Supreme Court in Chautauqua County, demanding the payment of the $306,048 while adding that interest fees, attorney fees, costs and disbursement and any other payment deemed necessary should be taken care of by the state.

It’s okay to say that it was an anticipatory breach of contract case that Patterson-Stevens INC had with the State. An anticipatory breach takes place when one party announces that he or she is not going to fulfill the contract by the due date that is listed on the contract.

When an anticipatory breach of contract happens, the other party can accept the repudiation and choose to be no longer bound by the contract.

Related: Do I Need to Get a Second Opinion About My Personal Injury Case?

Lawsuit Case Between New York University and Pfizer

NYU is of the opinion that the new cancer drug produced by Pfizer is a product of their decades-old technological breakthrough. The pharmaceutical company, Pfizer was sued at the Manhattan Supreme Court by New York University for breaching the contract. NYU argued that they are owed a portion of the sales of this new drug used in treating lung cancer. 

Legal Case Between Apple and Fortnite Creator Epic Games

Apple has dragged Fortnite creator Epic Games for a breach of contract, having used their platform to generate over $600,000 in sales. Although many do not know this, Fortnite creator Epic Games is a multi-billion dollar company. In a counterclaim, Apple believes that Epic Games creator do not want to pay anything for the value they derive from their App Store. They are seeking damages for an undisclosed amount. This case in the United States started in 2020 when Apple removed Epic Games from the App Store for creating a new version that allowed users to pay Fortnite creator without giving Apple their 30% cut.Another famous breach of contract case in 2021 is between JPMorgan Chase Bank and Tesla who are in a $162 million dispute. Let’s take a look at what an employment contract means.Legal Cases in Healthcare Caused by a Breach of ContractHealthcare breach of contract can occur between a healthcare professional and the management, a hospital and her suppliers, a healthcare company and an insurance provider, or between the government and hospital management. Whichever way, such a case will be addressed in court as a breach of contract.An example of this is the contract made between CaroMont Health in North Carolina and a company called Cogent Healthcare, which is a staffing firm that provided hospitalists, or doctors who care for patients in hospitals, for CaroMont Health. In 2013, CaroMont sued Cogent Healthcare because Cogent suddenly stopped supplying the facility with hospitalists in October of that year. This was not supposed to happen until December when CaroMont’s management had a new plan in place to manage the hospitalists.Another great example is the case between Laura Clarke, an England-based dancer and striper, and Mr. Kaleciński, a Polish surgeon. On 8th March 2022, the former sued the latter including the clinic for medical negligence that led to unsuccessful breast augmentation and uplift and thigh liposuction. Healthcare breach of contract cases come with dire consequences.

Flo Rida Gets $82.6 Million for Breach of Contract Against Celsius Holding INC

On January 18, 2023, a South Florida jury ruled that the makers of Celsius energy drink should pay Tramar Dillard, popularly known as Flo Rida $82.6m for breach of contract. Even though the rapper, Flo Rida owns a share in the company and has said publicly that will continue to drink Celsius energy drink, he still sued them in 2021 for breach of contract.

What is an Employment Contract?

An employment contract is an agreement made between an employer and an employee that provides employment rights, responsibilities and duties. This contract of employment showcases their implied and explicit terms and conditions.

A contract of employment becomes legally binding on both the employer and the employee the moment both of you sign it. However, a breach of such a contract may occur when any of you fails to live up to your responsibility. This is what we know as a breach of the employment contract.

Breach of Employment Contract

A breach of employment contract may occur when one party violates the terms of the written, verbal or implied terms of the agreement. This breach of employment contract can either come from the employer or the employee.

Irrespective of who the breach of employment contract comes from, there are a bunch of different ways to resolve it.

If it’s the employer that breached the contract, the employee can resolve it through any of these means: mediation, legal action, going to the industrial tribunal or civil courts. Each of these ways of resolving breach of employment contract cases caused by the employer has its pros and cons.

What happens if it is the employee that breached the contract? Well, your employer can choose to resolve the issues with you internally or take legal action against you, especially if it’s damaging to their brand reputation .

In April 2014, Nike filed a breach of contract lawsuit against three of their former designers by the name, Denis Dekovic, Marc Dolce and Mark Miner. In a 50-page civil complaint, the giant footwear company, Nike demanded that these three designers pay the sum of $10 million in damages.

Nike accused them of breach of contract, breach of duty of good faith and fair dealing, breach of duty of loyalty, misappropriation of trade secrets, tortious interference with current and prospective contractual and economic relations, and civil conspiracy.

Related: 6 Legal Challenges Business Owners May Face

Breach of contract happens from time to time, especially when two or more parties are involved. But if your goal is to get the best from every transaction and get more referrers, you must learn to keep to the terms of the agreement. Most cases of breach of contract are because someone defaulted.

But the question in the mind of most people is whether they will go to jail for breaching a contract. Can you go to jail for a breach of contract? Not likely. Legally speaking, breach of contract is not seen as a crime or even a tort. Insurance will cover you and your business if the breach of contract occurred as a result of a cyber attack on your online store .

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Australian contract law: a recent case study – sui v jiang [2021] nswca 285.

By Anthony Willis , Patrick Collins

Lost in translation: when the legal effect of a contract departs from its literal meaning

What was this case about?

This case illustrates the complications that can arise when the parties to a contract prepare the contractual document themselves, without any legal training, in a language other than English; leading to disputes over the English translation of the contract and its intended effect, as properly construed.

Ultimately, the plaintiff’s claim did not turn on a point of translation. Rather, the key issue for the courts to determine, at first instance and then on appeal, was whether to give the parties’ choice of words their literal meaning or a different legal effect based on the broader context and business objectives of the contract as a whole.

In a two-to-one majority decision, consistent with recent judgments in the High Court that stress the importance of context, the Court of Appeal upheld the primary judge’s decision to favour a legal effect that departed from the literal meaning of the contract, notwithstanding such an interpretation was ‘somewhat strained’. However, the minority opinion of Brereton JA sought to emphasise the primacy of the words chosen by the parties in determining a contract’s legal effect.

What happened?

Mr Guangyi Sui ( Sui ) was a Chinese businessman pursuing investment opportunities in Australia as a requirement of his visa. Sui met Mr Zhaoquing Jiang ( Jiang ), a fellow businessman and prominent member of the Australian Dongbei Chinese Association. Together Sui and Jiang met with representatives of the Northern Territory Government to discuss a potential investment in two particular plots of land in the Northern Territory, each being 10 square kilometres ( Land ), to grow Chinese herbs.

To that end, in May 2017, Sui and Jiang entered into a written agreement to develop the Land ( Contract ). The Contract was:

• drafted almost entirely in Chinese Mandarin
• only five clauses long
• drafted by Sui without the involvement of a lawyer
• perhaps unsurprisingly, the subject of proceedings before the Supreme Court of New South Wales, at first instance, and subsequently the Court of Appeal.

The contract

Both parties accepted the Contract provided that Sui would:

• invest $1.5 million AUD in a company, Australian Fulin Agriculture Pty Ltd ( Fulin ) which owned interests in the Land
• acquire a 40% shareholding in Fulin
• receive a 10% return on the funds invested, each year for three years.

The controversy in this case concerned what the parties had agreed would happen in the fourth year. The relevant provision of the Contract (translated into English) stated:

From the fourth year onwards, [Sui] is entitled to request an increase in the return on his investment, or choose to take part in the company's operation and become a true 40% shareholder, or choose to leave the company, but [Sui] is entitled to transfer the 40% equity in the 20 square kilometres to others at the then market price. In the event the sale price is for less than AUD1.5 million, [Jiang] shall make up the difference. Prior to the transfer of the land, [Jiang] guarantees that [Sui] has legal ownership of 8 square kilometres of the agricultural land and shall provide [Sui] with relevant legal documents.

The controversy arose as a result of Fulin’s failure to comply with the conditions of the Crown leases that Fulin had acquired from the Northern Territory Government for the Land ( Lease ). The Lease required Fulin to:

• clear and cultivate with agricultural crops at least 1% of the Land in each year of the five years of the term of the Lease
• construct sufficient infrastructure on the Land as to enable the Land to be worked, within five years of the commencement of the Lease.

If Fulin satisfied these conditions, the Lease entitled Fulin to convert the Crown lease to a freehold.

However, after two years from the commencement of the Lease, no crops had been planted and no infrastructure had been constructed on the Land. After learning this, Sui commenced proceedings claiming that Jiang had repudiated the Contract.

Sui claimed that Fulin’s failure to comply with the conditions of the Lease prevent the conversion of the Crown leases into freehold interests and, by extension, prevented Jiang from transferring a freehold interest in 40% of the Land to Sui pursuant to the Contract, if Sui elected to exit the arrangement and leave the company in the fourth year. Sui commenced proceedings in the third year of the Contract and, accordingly, claimed damages for anticipatory breach.

In Jiang’s defence, he submitted that the Contract merely gave Sui a right to sell his 40% shareholding in Fulin; rather than 40% of the Land itself.

Competing translations

Incidentally, the parties dedicated significant efforts to arguing over the English translation of a clause in the Contract that was found to be ‘essentially irrelevant’ to Sui’s principal claim (as his counsel admitted in oral submissions to the appellate court). The clause contained the Mandarin word 'gu quan' (股权), which has a variety of meanings including:

• ‘shareholding’
• ‘equity’ (including both an interest in land or an interest in a company)
• ‘legal ownership’; or
• ‘shareholder’s rights’.

The court considered evidence provided by expert translators to determine which possible meaning of ‘gu quan’ was the best fit for the proper construction of the Contract.

However, in respect of the clause set out above, upon which Sui based his claim for anticipatory breach, there were few salient differences between the translations advanced by each party’s expert witnesses.

The judgement

The primary judge found that the Contract did not entitle Sui to acquire a freehold interest in the Land, and the Court of Appeal upheld that judgement in a two-to-one majority decision. In dismissing Sui’s construction of the Contract, Leeming JA (with whom Gleeson JA agreed) reasoned that:

• the Contract did not identify which particular eight square kilometres were to be transferred to Sui, or any mechanism for doing so, and some parts of the Land were presumably more valuable than others. Accordingly, it would not make commercial sense if the Contract entitled Jiang to choose the least valuable eight square kilometres to transfer to Sui, at the time when the parties were separating their commercial interests;
• if Sui became entitled to legal ownership of eight square kilometres of the Land, he would have to somehow relinquish his 40% shareholding in Fulin but the Contract was silent in that regard;
• if Sui’s shareholding was a security interest in the Land analogous to that of a mortgagee (as Sui contended), the Contract was conspicuously silent about repayment of the $1.5 million;
• evidence of the background to the parties’ transaction showed that Sui had bought out a minority shareholder in Fulin (with whom Jiang had been ‘having some personality difficulties’). His Honour concluded that Sui’s right to sell in the fourth year of the Contract correlated to what he had bought in the first place; that is, a minority shareholding in Fulin rather than the Land itself; and
• Sui’s translator admitted under cross-examination that she thought that the parties’ words, translated literally as ‘ prior to the transfer ’, implicitly referred to the transfer of the Land but the Contract did not include an express reference to the Land in the relevant sentence. The Court of Appeal majority held that the parties’ choice to not mention the Land made Jiang’s construction of the Contract more plausible than that argued by Sui.

In reaching its decision, the Court of Appeal majority relied upon the well-established legal principles for construing commercial contracts: [1]

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

Leeming JA conceded that the majority judgment’s interpretation of the Contract departed from the literal meaning of the words chosen by the parties, lamenting that ‘ there is no way of construing this admittedly imperfectly drafted contract without there being some distortion from the literal meaning ’.

However, in his dissenting judgement, Brereton JA held that the last sentence of the relevant clause (which clearly and explicitly envisaged the transfer of ownership of the Land to Sui) was ‘ intractable ’ and consistent with the Contract as a whole, which was primarily focussed on the Land – being Fulin’s only real asset.

Further, Brereton JA found that the absence of any provisions in the Contract dealing with the various commercial matters that the majority of the appellate court counted against the construction argued by Sui (e.g. the retransfer of his shares and subdivision of the Land) was ‘ unremarkable ’; given that the Contract was drafted by laypersons and provided that ‘ matters not covered by this agreement may be dealt with through friendly negotiation ’.

Key takeaways

This is not the first time the Chinese language has vexed commercial dealings in Australia. [2] However, in an increasingly global market, contracts can be expressed in a variety of languages and Australian courts have shown a willingness to scrutinise translations.

While Australian government entities rarely enter into contracts written in a language other than English (aside from international treaties, which are frequently stated to be authoritative in multiple languages), there are often substantial parts of commercial contracts drafted by government officials who have no particular expertise in contract drafting or Australian contract law. For example, detailed specifications of the goods or services being procured are often set out in a Statement of Requirements or Statement of Work prepared by technical subject-matter experts ( SMEs ), sometimes without any legal review.

The words typically chosen by SMEs may be commonplace amongst those in the industry, but might not necessarily be intended to connote the ordinary meaning of the word (which is what a court might understand such terms to mean) nor carry any special meaning recognised by the industry, to which an expert witness might attest.

Further, with a focus on the relevant goods or services themselves, SMEs might not think to address in their drafting the context of other relevant provisions of the contract or the broader commercial purposes of the parties, to which the courts will have regard when construing the objective meaning of contractual terms.

This case study demonstrates how the application of legal skills to the art of contract drafting, based on an expert understanding of the principles of contract interpretation, would have helped to ensure that the legal effect given to the words chosen by the parties (as determined by the courts) matched up with the parties’ actual intentions as to the meaning of those words.

[1] Sui v Jiang [2021] NSWSC 435 at [49] citing Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47]. [2] Southcorp Brands Pty Ltd v Australia Rush Rich Winery Pty Ltd [2019] FCA 720

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Contract Law Cases: 21 Leading Case on the Law of Contract

In today’s post, I will be sharing a list of some of the leading cases on contract law. This is basically to help scholars, lawyers and law students all of the world, find contract law cases so as to enable them consolidate their legal arguments, articles and points in law examinations. If you have been searching for cases to fortify your points in any matter that concerns contract, then search no further. Trust me; this article contains almost all the leading cases on the law of contract.

Nonetheless, before I move to the crux of this article, I would like to share some of basic information about the law of contract with you. This is also very pertinent because it will help you to understand the cases that will be mentioned here wholesomely. So what is a contract?

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Table of Contents

What is a contract?

Contract has been given different definitions by different people. According to Sir Fredrick Pollock , A contract is a promise or set of promises which the law will efforce. More so, the American Law Institute gave an elaborate definition in their paper titled “ Restatement of American Law: Contracts ” when they defined contract as “ a promise or set of promises, the breach of which the law gives a remedy, or performance of which the law in some way recognizes as a duty.” 

In my view, “a contact is an agreement giving rise to obligations which are enforced or recognized by law”. Conversely, it should be noted that while every contract is ultimately an agreement, it is not every agreement that is a contract.

Characteristics of a contract

Below are some of the characteristics of a binding contract:

• There must be an offer and acceptance (the agreement)
• There must be an intention to create legal relations
• There is a requirement of written formalities in some cases
• There must be consideration (Except if the agreement is under seal)
• The parties must also have the capacity to contact
• There must be genuineness of consent by the parties to the terms of the contract
• The contract must not be contrary to public policy

Also read : Fundamental human rights in Nigerian Constitution and cases

Classification of Contract

Basically, contract is classified into Simple contract or Formal contract. The two classifications of contract will be explained explicitly below:

Simple contract:

A simple contract is also called an informal contract. It is a contract, whether writen or oral, which is not under seal. It can also be implied from the conduct of parties. Simple contract are not binding except there is consideration. In a simple or informal contract, only a party who has furnished consideration can bring an action to enforce the contract.

Formal contract:

On the other hand, a formal contract is a contract which is reduced to writing, singed by parties contracting and impressed with a seal. It is also called a specialty contact or a deed. The basic features of a formal contract is to that it must be signed, sealed and delivered. These actions constitute the execution of a deed.

Now that you known what a contract is, the various types of contract and the characteristics of a contract, we will now see some of the leading cases in contract law.

Contact law cases

Below are some of the cases in the law of contract:

Carlill v Carbolic Smoke Ball Co

Andrews v hopkinson, fisher v bell, spencer v harding, central london property trust ltd v high trees house ltd, brodgen v metropolitan railway co., lampleigh v braithwaite, roscolar v thomas, stevenson v mclean, eastwood v kenyon, white v bluet, combe v combe, dela bere v pearson, read v dean, bournemouth athletic football club ltd v manchester united football club, tinn v hoffman & co, couturier v hastie.

• Dunlop Pneumatic Tyre Co Ltd v Selfridge

Griffith v Brymer

Darkin v lee, startup v macdonald.

Yeah! Those are some of the leading cases in contract law. Nevertheless, as we continue, will be sharing with you the case summary of each of the cases mentioned in the list above with their citations. I enjoin you to read painstakingly so that you will achieve your purpose for reading this work. Now, below is the case summary of the leading cases in the law of contract.

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Citation : [1893] 1 QB 256

The case of Carlill v Carbolic Smoke Ball Co is a good illustration of a unilateral contract. In this case, the defendant were proprietors of a medical preparation called “ The Carbolic Smoke Ball” . They advertised in various newspapers and magazines offering to pay €100 to any person who contracted influenza after using the ball three times a day for two weeks.

They added that they had deposited €1,000 at the Alliance Bank, Regent Street, to show their sincerity in the matter. The plaintiff, a lady, used the ball as was advertised and was attacked by influenza. She sued for €100 and the company agured that there was no intention to create legal relations.

The court held in favor of the plaintiff and said that the fact that €1,000 was deposited at the Alliance Bank, shows that there was an intention to create legal relations.

Citation: [1956] 3 All ER 422

The case of Andrews v Hopkinson is one of the contract cases that explains where a collateral contract will fail with the main contract. Apparently, a collateral contract is a preliminary contract which is usually oral and forms the reason or the inducement for the making of another related contract.

In the case of Andrews v Hopkinson, the collateral contract failed with the main contract. Here, a dealer said to the plaintiff, “ It is a nice little bus, I would stake my life on it. You will have no trouble with it. ” The plaintiff entered into a written hire-purchase contract with a finance company. The car was not roadworthy. The court held that the dealer was liable.

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Citation: [1960] 3 All ER 731

The case of Fisher v Bell is a contract case that is usually used to explain the difference between an invitation to treat and an offer. In this case, the respondent, shopkeeper, displayed a knife with a price tag. He was charged for offering to sale a knife contrary to section 1(1) of the Restriction of Offensive Weapons Act 1959 .

The question that arose for determination in court was whether the display of this knife constituted an offer for sale within the meaning in the Restriction of Offensive Weapons Act 1959. It was held by the Court of Appeal that the display was an invitation to offer and so the shopkeeper was not liable.

Citation: [1870] LR 5 CP 561

In Spencer v Harding, the defendant sent out circulars inviting tenders to buy stock. The Plaintiff claimed that the circular was an offer to sell the stock to the highest bidder and that they had sent the highest bid which the plaintiff had refused to accept.

The court held that the circular was an invitation to treat and not an offer. Wiles J said thus: “ It is a mere attempt to ascertain whether an offer can be obtained within such a margin as the seller are willing to accept.”

Citation : [1947] KB 130

The case of Central London Property Trust Ltd v High Trees House Ltd is also one of the leading cases in the law of contract. This case changed the former rule of law in pinnel’s case. The case is usually referred to as the High Trees case or principle of Equitable Estoppel.

In Central London Property Trust Ltd v High Trees House Ltd, the plaintiff least a block of flat to the defendant at a rent of €2,500 per annum in September 1939. In January 1940 the plaintiff agreed in writing to reduce the rent by half because of war condition which had caused many vacancies in the flats. No express limit was set for the operation of this reduction.

From 1940 to 1945 the defendant paid the reduced rent. In 1945, the flats became fully occupied again. The plaintiff’s company then claimed the full rent, suing for rent at the ordinary rate for the last two quarters of 1945.

It was held by Lord Denning that, as agreement for the reduction of rent had been acted upon by the defendants, the plaintiff were estopped in equity from claiming the full rent from 1941 until early 1945 when the flats were fully let.

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Citation: [1877] 2 AC 666

This is one of the contract cases that is offen cited to backup the rule that a contract can be made by conduct. In this case, Brodgen had for many year supplied the defendant company with coal without a formal contract. Brodgen then suggested that the relationship be regularised through a formal contract. Metropolitan’s agent sent a draft agreement to Brodgen who inserted an Arbitrator’s name in the space provided for it, signed it and wrote it away in his drawer and nothing further was done to complete its execution.

Both parties acted on the strength of the terms contained in the draft, supplying and paying for the coal in accordance with its clauses until a dispute arose and Brodgen denied that any binding contract existed between them. The house of Lord’s held that a contract arisen by conduct.

Citation : [1615] Hob 105

In this case, the defendant, Braithwaite, had killed Patrick Mahume. He then requested the plaintiff to do all he could to obtain a royal pardon for him from the king. To this end, the plaintiff exerted himself and undertook a lot of journeys to and from London, incurring certain expenses.

He succeeded in obtaining the pardon and the defendant promised to pay him the sume of €100 for his trouble and expenses. It was held that the plaintiff was entitled to the sum as his services were procured at the defendant’s previous request an in circumstances in which it was responsible to expect that payment would be made for the services. Accordingly, there was consideration for the defendant’s promise.

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Citation: [1842] 2QB 234

To wholesomely discuss past consideration as a topic in the law of contract, the case of Roscolar v Thomas must be mentioned. In this case, the plaintiff bought a horse from the defendant. After sometime, the defendant promised the plaintiff that it was a sound horse, free from vice. The horse was in fact a vicious horse. The plaintiff sued the defendant for breach of promise.

It was held that the action will fail. If the promise had been given at the time of the sale, it would have been supported by consideration, but since it was given after the sales had taken place, the consideration which the plaintiff furnished was past and he had furnished no new consideration for the defendant’s promise.

Citation: [1880] 5 QBD 346

In Stevenson v McLean, the defendant offered on a Sunday to sell the plaintiff some quantity of iron. The offer was left open till close of business on Monday. On Monday, the plaintiff telegraphed ro ask for information. On that same Monday, at 10:00am, the defendant received a telegram but didn’t reply it. On that same day, the plaintiff accepted the original offer at 1.34pm. At 1.25pm the defendant revoked the offer by telegram. At 1.46pm the plaintiff received telegram of revocation.

On hearing the matter, the court held that the plaintiff first telegram was not a counter offer but a mere inquiry, so that the offer was still open when the plaintiff accepted it. The plaintiff had accepted the offer before the defendant’s revocation was communicated to him.

Citation: [1840] 11 Ad & El 438

Eastwood v Kenyon is the case in contract that is used to explain that moral obligation does not amount to consideration. In this case, the death of John Sutcliff left his infant daughter as his sole heiress. The plaintiff, as the girl’s guardian, spent money on her education and for the benefit of the estate, and the girl, when she came of age, promised ro reimburse him.

She then married the defendant, who also promised to pay. The plaintiff sued the plaintiff on this promise and the court dismissed the action, reiterating the rule that moral obligation does not amount to consideration. The court noted that if the notion is accepted it would destroy the requirement of consideration as the law requires an additional element to the defendant’s promise. That element is consideration and it cannot be a mere moral obligation.

Citation: [1853] 23 LJ Ex 36

The case of White v Bluet explains the position that consideration in contract need not to be adequate by sufficient. In this case, a sun owned his father a sum of money. Subsequently, the sun harassed his father with frequent complaints about the way his father distributed his wealth among his children which was unfavorable to him.

The son then alleged that his father promised him that if he would stop complaining, he (the father) would discharge him from the debt and he stopped. The question before the court was whether this action of the son constituted consideration for the father’s promise. The court held that it did not because:

The father had a right to distribute his property in any manner he liked and so the son had no right to complain in the first place.

The son had no right to complain; thus is abstaining from doing what he had no right to do constituted no consideration for the father’s promise.

Citation : [1951] 2 KB 213

This is a contract case where the court held that consideration is an essential element of a binding contract. Here, a wife started proceedings against the husband for divorce and she obtained a decree nisi against the husband. The husband then promised to pay her an annual allowance of €100 free of tax as a permanent maintenance for her.

After the decree nisi was made absolute, the husband never kept his promise. Thereupon the wife brought an action against him to make him pay the money. The court held that she didn’t offer consideration for the husband’s promise.

Citation : [1908] 1 KB 280

In this case, the defendant placed an advertisement in the newspaper to give financial advice to readers. The plaintiff wrote, asking for the name of a good stockbroker. The editor negligently recommended someone who was an undischarged bankrupt.

On the strength of the editor’s advice, the plaintiff sent some money to the broker, who misappropriated it. The plaintiff brought an action in court seeking to recover his money from the the newspaper. The issue in court was whether the plaintiff furnished any consideration.

The court considered that many people bought newspaper because of that publication. It further held that the plaintiff had furnished consideration for the contract. The defendant could and did benefit from the plaintiff buying the newspaper and the plaintiff had also consented to the publication of his question in the defendant’s newspaper if the defendants wished to do so.

Citation: [1949] 1 KB 188

In the case of Read v Dean, the plaintiff hired the defendant’s moto launch for a holiday with his family on the river Thames. Two hours after he had set sail, the launch caught fire.

The firefighting equipment provided in the launch was out of order and the plaintiff suffered serious injuries and lost all his belongings on board. It was held that there must be implied into the contract of hire an undertaking by the defendant to make the launch as fit for the purpose of the hiring as reasonable care could make it, and that the defendant was therefore liable.

Citation: Vol Xi (2) Student Law Report 22

The case of Bournemouth Athletic Football Club Ltd v Manchester United Football Club is another popular case in the law of contract. In this case, a transfer agreement was made between the two football clubs. Under it, a footballer was to be transferred from Bournemouth to Manchester united for €194,445 in addition, a further sum of €27,777 was to be paid to Bournmouth if the footballer scored 20 goals in the first-team competitive matches. From October to December 1972, the football scored 4 goals in 11 matches. In December, Manchester United appointed a new manager who re-organised the team.

As a result, the footballer was transferred in early 1973 to Westham United Football club for €170,000. The plaintiff argued that the contract of the defendant in transferring the footballer was in Breach of the contract because there was an implied term in the contract that the footballer was entitled to a reasonable opportunity to score the goals. The court of appeal held that such term must be implied in order to give business efficacy to a contract.

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Citation: [1873] 29 LT 271

The court in Tinn v Hoffman & Co held that a cross-offer does not constitute a contract.

The facts of the case are as follows: the defendant wrote to the plaintiff offering to sell him 800 tons of iron at 69s per ton. The plaintiff wrote to the defendant, on the same day offering to buy 800 tons of iron at 69s per ton. The letters crossed in the post and the court held that there was no contract.

Citation: [1856] 5 HLC 673

This is the leading contract law case that stipulates the position of the law where there is a mistake as to the existence of the subject matter of the contract. In Couturier v Hastie, a man bought a cargo of corn which he and the seller thought at the time of the contract, to be in transit from Salonica to England, but which, unknown to them had become fermented and had already been sold by the master of the ship to a Tunis. It was held that the contract was void and the buyer not liable for the price of the cargo.

In the words of Lord Cranworth , “ The contract plainly imports that there was something which was to be sold at the time of the contract and something to be purchased. No such thing existing; I think the Court of Exchequer Chamber has come to the only reasonable conclusion upon it . ..”

Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd

Citation: [1915] AC 847

This is one of the leading contract cases that is associated with the principle of privity of contract. The principle states that only a party to a contract can enjoy right or suffer burdens partaining to the contract.

In Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd, the plaintiff sold tyres to a certain dealer on the understanding that he would not re-sell below a certain price and that in the event of a sale to customers the dealer would extract the same promise from them.

The dealer sole the tyres to Selfridge who agreed to observe the restrictions and to pay Dunlop €5 for each Tyre they sold below the restricted price. Selfridge in fact sold the tyres below the restricted price to a customer and Dunlop brought an action against them to enforce the promise to pay €5 per tyre, for each breach.

It was held that while Selfridge had committed to breach the contract between him and the dealer, Dunlop was not a party to this contract and had furnished no consideration for the defendant’s promise.

Citation: [1903] 19 TLR 434

This is one of the cases under Mistake as a topic in contract law. In Griffith v Brymer, a contract was made for the hire of a room on 26 June 1902, the day fixed for the coronation of King Edward VII, for the purpose of viewing the coronation procession.

At the time the contract was made, it was unknown to the parties, the decision to postpone the coronation had already been taken. Since the contract was merely for the hire of the room on 26 June to view the coronation procession, performance was impossible. The contract was held to be void.

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Citation: [1916] 1 KB 566.

This contract case explains the principle that where a party who performed his obligation defectively but substantially can sue for the contract price, but he will be liable to have deducted from the price the cost of making good the deficiency.

In Darkin v Lee, the plaintiff contracted to carry out repairs on the defendant’s house. He carried out the repairs but the work was not done in accordance with the contact’s specification. It was held that the plaintiff was entitled to be paid the agreed sum subject to a deductive equal to the cost of putting the defect right.

Citation: [1843] 6 M & G 593.

The rule of law in Startup v Macdonald is that; where the obligation under a contract is to deliver goods or render services, tender of such goods and services which is refused, discharges the party making the tender from any further obligation and enables him to sue for a breach of contract.

In Startup v Macdonald, the plaintiff agreed to sell 10 tonnes of oil to the defendant within the last 14 days of March. Pursuant to this agreement, the plaintiff delivered the oil to the defendant at 8:30pm on 31 March, a Saturday, but the defendant refused to accept the delivery because of the lateness of the hour.

It was held that the plaintiff made a valid tender of the goods and therefore discharged his obligations under the contract and the defendant was therfore liable in damages for non-acceptance of the goods.

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Final words

Those are some of the leading contract law cases you should know. Hope this article was able to give you exactly what you wanted. If you have any case you were really expecting to be in this list but was not mentioned here, kindly let us know using the comment section. Accordingly, share you comments and questions in the comment section too. I will be very glad to give you a reply.

Edeh Samuel Chukwuemeka, ACMC, is a lawyer and a certified mediator/conciliator in Nigeria. He is also a developer with knowledge in various programming languages. Samuel is determined to leverage his skills in technology, SEO, and legal practice to revolutionize the legal profession worldwide by creating web and mobile applications that simplify legal research. Sam is also passionate about educating and providing valuable information to people.

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EPAM Defends Interests of Tele2 in Case Against Moscow Metro

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Egorov Puginsky Afanasiev & Partners has successfully defended the interests of T2 Mobile (Tele2) – a nation-wide mobile operator in Russia – in what the firm describes as "a precedent-setting case against the Moscow Metro regarding unfair tariffs for placing telecommunications equipment in the metro."

EPAM was able to convince the competition authority of the Metro’s dominant position as sole owner of unique infrastructure, and "of the unfounded and discriminatory nature of the one-off payment applied to Tele2 for placing communications equipment at each station."

As a result, the firm reports, "the Moscow Office of the Federal Antimonopoly Service issued a warning requesting that the Moscow Metro rescind the discriminatory tariffs for Tele2 and offer [it] the same conditions for placing telecommunications equipment as those enjoyed by other telecom operators. This will have a positive effect on competition in the sector. The warning is an important step in allowing a fourth telecom provider to become fully operational in the metro and will ensure that Tele2 customers can make the most of its telecommunication services."

The EPAM team consisted of Partner Anna Numerova, Counsel Denis Gavrilov, and Associate Alexander Balyberdin.

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40 facts about elektrostal.

Written by Lanette Mayes

Modified & Updated: 02 Mar 2024

Reviewed by Jessica Corbett

Elektrostal is a vibrant city located in the Moscow Oblast region of Russia. With a rich history, stunning architecture, and a thriving community, Elektrostal is a city that has much to offer. Whether you are a history buff, nature enthusiast, or simply curious about different cultures, Elektrostal is sure to captivate you.

This article will provide you with 40 fascinating facts about Elektrostal, giving you a better understanding of why this city is worth exploring. From its origins as an industrial hub to its modern-day charm, we will delve into the various aspects that make Elektrostal a unique and must-visit destination.

So, join us as we uncover the hidden treasures of Elektrostal and discover what makes this city a true gem in the heart of Russia.

Key Takeaways:

• Elektrostal, known as the “Motor City of Russia,” is a vibrant and growing city with a rich industrial history, offering diverse cultural experiences and a strong commitment to environmental sustainability.
• With its convenient location near Moscow, Elektrostal provides a picturesque landscape, vibrant nightlife, and a range of recreational activities, making it an ideal destination for residents and visitors alike.

Known as the “Motor City of Russia.”

Elektrostal, a city located in the Moscow Oblast region of Russia, earned the nickname “Motor City” due to its significant involvement in the automotive industry.

Home to the Elektrostal Metallurgical Plant.

Elektrostal is renowned for its metallurgical plant, which has been producing high-quality steel and alloys since its establishment in 1916.

Boasts a rich industrial heritage.

Elektrostal has a long history of industrial development, contributing to the growth and progress of the region.

Founded in 1916.

The city of Elektrostal was founded in 1916 as a result of the construction of the Elektrostal Metallurgical Plant.

Located approximately 50 kilometers east of Moscow.

Elektrostal is situated in close proximity to the Russian capital, making it easily accessible for both residents and visitors.

Known for its vibrant cultural scene.

Elektrostal is home to several cultural institutions, including museums, theaters, and art galleries that showcase the city’s rich artistic heritage.

A popular destination for nature lovers.

Surrounded by picturesque landscapes and forests, Elektrostal offers ample opportunities for outdoor activities such as hiking, camping, and birdwatching.

Hosts the annual Elektrostal City Day celebrations.

Every year, Elektrostal organizes festive events and activities to celebrate its founding, bringing together residents and visitors in a spirit of unity and joy.

Has a population of approximately 160,000 people.

Elektrostal is home to a diverse and vibrant community of around 160,000 residents, contributing to its dynamic atmosphere.

Boasts excellent education facilities.

The city is known for its well-established educational institutions, providing quality education to students of all ages.

A center for scientific research and innovation.

Elektrostal serves as an important hub for scientific research, particularly in the fields of metallurgy, materials science, and engineering.

Surrounded by picturesque lakes.

The city is blessed with numerous beautiful lakes, offering scenic views and recreational opportunities for locals and visitors alike.

Well-connected transportation system.

Elektrostal benefits from an efficient transportation network, including highways, railways, and public transportation options, ensuring convenient travel within and beyond the city.

Famous for its traditional Russian cuisine.

Food enthusiasts can indulge in authentic Russian dishes at numerous restaurants and cafes scattered throughout Elektrostal.

Home to notable architectural landmarks.

Elektrostal boasts impressive architecture, including the Church of the Transfiguration of the Lord and the Elektrostal Palace of Culture.

Offers a wide range of recreational facilities.

Residents and visitors can enjoy various recreational activities, such as sports complexes, swimming pools, and fitness centers, enhancing the overall quality of life.

Provides a high standard of healthcare.

Elektrostal is equipped with modern medical facilities, ensuring residents have access to quality healthcare services.

Home to the Elektrostal History Museum.

The Elektrostal History Museum showcases the city’s fascinating past through exhibitions and displays.

A hub for sports enthusiasts.

Elektrostal is passionate about sports, with numerous stadiums, arenas, and sports clubs offering opportunities for athletes and spectators.

Celebrates diverse cultural festivals.

Throughout the year, Elektrostal hosts a variety of cultural festivals, celebrating different ethnicities, traditions, and art forms.

Electric power played a significant role in its early development.

Elektrostal owes its name and initial growth to the establishment of electric power stations and the utilization of electricity in the industrial sector.

Boasts a thriving economy.

The city’s strong industrial base, coupled with its strategic location near Moscow, has contributed to Elektrostal’s prosperous economic status.

Houses the Elektrostal Drama Theater.

The Elektrostal Drama Theater is a cultural centerpiece, attracting theater enthusiasts from far and wide.

Popular destination for winter sports.

Elektrostal’s proximity to ski resorts and winter sport facilities makes it a favorite destination for skiing, snowboarding, and other winter activities.

Promotes environmental sustainability.

Elektrostal prioritizes environmental protection and sustainability, implementing initiatives to reduce pollution and preserve natural resources.

Home to renowned educational institutions.

Elektrostal is known for its prestigious schools and universities, offering a wide range of academic programs to students.

Committed to cultural preservation.

The city values its cultural heritage and takes active steps to preserve and promote traditional customs, crafts, and arts.

Hosts an annual International Film Festival.

The Elektrostal International Film Festival attracts filmmakers and cinema enthusiasts from around the world, showcasing a diverse range of films.

Encourages entrepreneurship and innovation.

Elektrostal supports aspiring entrepreneurs and fosters a culture of innovation, providing opportunities for startups and business development.

Offers a range of housing options.

Elektrostal provides diverse housing options, including apartments, houses, and residential complexes, catering to different lifestyles and budgets.

Home to notable sports teams.

Elektrostal is proud of its sports legacy, with several successful sports teams competing at regional and national levels.

Boasts a vibrant nightlife scene.

Residents and visitors can enjoy a lively nightlife in Elektrostal, with numerous bars, clubs, and entertainment venues.

Promotes cultural exchange and international relations.

Elektrostal actively engages in international partnerships, cultural exchanges, and diplomatic collaborations to foster global connections.

Surrounded by beautiful nature reserves.

Nearby nature reserves, such as the Barybino Forest and Luchinskoye Lake, offer opportunities for nature enthusiasts to explore and appreciate the region’s biodiversity.

Commemorates historical events.

The city pays tribute to significant historical events through memorials, monuments, and exhibitions, ensuring the preservation of collective memory.

Promotes sports and youth development.

Elektrostal invests in sports infrastructure and programs to encourage youth participation, health, and physical fitness.

Hosts annual cultural and artistic festivals.

Throughout the year, Elektrostal celebrates its cultural diversity through festivals dedicated to music, dance, art, and theater.

Provides a picturesque landscape for photography enthusiasts.

The city’s scenic beauty, architectural landmarks, and natural surroundings make it a paradise for photographers.

Connects to Moscow via a direct train line.

The convenient train connection between Elektrostal and Moscow makes commuting between the two cities effortless.

A city with a bright future.

Elektrostal continues to grow and develop, aiming to become a model city in terms of infrastructure, sustainability, and quality of life for its residents.

In conclusion, Elektrostal is a fascinating city with a rich history and a vibrant present. From its origins as a center of steel production to its modern-day status as a hub for education and industry, Elektrostal has plenty to offer both residents and visitors. With its beautiful parks, cultural attractions, and proximity to Moscow, there is no shortage of things to see and do in this dynamic city. Whether you’re interested in exploring its historical landmarks, enjoying outdoor activities, or immersing yourself in the local culture, Elektrostal has something for everyone. So, next time you find yourself in the Moscow region, don’t miss the opportunity to discover the hidden gems of Elektrostal.

Q: What is the population of Elektrostal?

A: As of the latest data, the population of Elektrostal is approximately XXXX.

Q: How far is Elektrostal from Moscow?

A: Elektrostal is located approximately XX kilometers away from Moscow.

Q: Are there any famous landmarks in Elektrostal?

A: Yes, Elektrostal is home to several notable landmarks, including XXXX and XXXX.

Q: What industries are prominent in Elektrostal?

A: Elektrostal is known for its steel production industry and is also a center for engineering and manufacturing.

Q: Are there any universities or educational institutions in Elektrostal?

A: Yes, Elektrostal is home to XXXX University and several other educational institutions.

Q: What are some popular outdoor activities in Elektrostal?

A: Elektrostal offers several outdoor activities, such as hiking, cycling, and picnicking in its beautiful parks.

Q: Is Elektrostal well-connected in terms of transportation?

A: Yes, Elektrostal has good transportation links, including trains and buses, making it easily accessible from nearby cities.

Q: Are there any annual events or festivals in Elektrostal?

A: Yes, Elektrostal hosts various events and festivals throughout the year, including XXXX and XXXX.

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Politics latest: Ministers confirm they'll vote against smoking ban; Sunak and Netanyahu hold phone call

Kemi Badenoch and Anne-Marie Trevelyan reveal they won't be backing the government's legislation to effectively ban smoking; Number 10 criticises Brussels police after a mayor issues an order to shut down the National Conservatism Conference being held in the city.

Tuesday 16 April 2024 18:55, UK

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• Minister joins Badenoch in confirming she won't back government's smoking ban
• Sophy Ridge:  Why the next Tory leadership contest will loom large over tonight's vote
• Number 10 criticises 'extremely disturbing' bid to shut down National Conservatism conference by Brussels police
• Farage - who addressed event - speaks out
• Darren McCaffrey: Crackdown only helps cancel culture cause espoused by NatCon attendees
• Rwanda bill heading back to Commons on Wednesday after government suffers four defeats in Lords
• Live reporting by Ben Bloch and (earlier)   Faith Ridler

Rishi Sunak has spoken by phone to his Israeli counterpart Benjamin Netanyahu almost three days after Iran's attack on Israel that the UK helped stop.

We've just had a readout from Downing Street on the contents of the phone call.

A Downing Street spokesperson said the PM "reiterated the UK's steadfast support for Israel's security and for wider regional stability.

"Prime Minister Netanyahu thanked the UK for its rapid and robust support in the face of Iran’s reckless and dangerous attack on Saturday."

The spokesperson went on to say that Iran had "badly miscalculated and was increasingly isolated on the global stage".

The PM "stressed that significant escalation was in no one's interest and would only deepen insecurity in the Middle East" - and told his counterpart that this is a moment for"calm heads to prevail".

He added that the G7 is "coordinating a diplomatic response".

Mr Sunak and Mr Netanyahu also discussed Gaza, and the PM told his counterpart that he is "gravely concerned about the deepening humanitarian crisis", and called for much more aid to enter the strip.

The PM also "said it was deeply disappointing that Hamas blocked a deal at the weekend that would have saved Palestinian lives and secured the safe release of hostages".

As we reported earlier today, a local mayor in Belgium ordered the police to shut down the National Conservatism conference, which was being attended by Reform UK's honorary president Nigel Farage and former home secretary Suella Braverman.

The mayor cited public safety fears and not wanting the "extreme right" in the city.

The event was eventually not closed down, but police stopped people entering the venue.

The prime minister of Belgium, Alexander De Croo, has now condemned the action of the local mayor.

He said in a post on X: "What happened at the Claridge today is unacceptable.

"Municipal autonomy is a cornerstone of our democracy but can never overrule the Belgian constitution guaranteeing the freedom of speech and peaceful assembly since 1830.

"Banning political meetings is unconstitutional. Full stop."

A government minister has confirmed she will not be supporting the government's legislation to ban smoking. 

Anne-Marie Trevelyan, who is a minister in the Foreign Office minister wrote on X: "I have pondered long and hard about how to vote and have decided that in its present form I cannot support it.

"This is just stage one of the legislation and I hope that at the next stage we can make amendments which will make it law which will be more likely to actually deter young smokers without removing freedom of choice for adults.

"My granny smoked all her life, the rest of us have always been opposed to it as a result. But her ability to decide for herself is one which I would not want to remove.

"So what might work? That we raise the age of being allowed to smoke to 21, since most young people start before they are 20.

"Logically this will therefore see far far fewer people take up the bad habit in the first place."

Her comments come after Kemi Badenoch, the business and trade secretary, announced she would be voting against the bill (see 17.42 post).

In the final vote on amendments to the government's Rwanda bill today, the Lords handed Rishi Sunak a fourth defeat.

This amendment mandates that those who worked with the UK military or government overseas, such as Afghan interpreters, to be exempted from removal to Rwanda.

The House of Commons rejected a similar measure yesterday, but the Lords are insisting.

The result is:

• 253 in favour;
• 236 against.

That means the amendment passes with a majority of 57.

As a result of today's votes, the bill will return to the House of Commons tomorrow for MPs to have their say, as the parliamentary "ping-pong" process continues.

After a series of wins in the House of Commons yesterday, the government is suffering a series of defeats in the House of Lords today.

Peers just voted in favour of an amendment to restore the jurisdiction of domestic courts in relation to the safety of Rwanda and enable them to intervene.

That means the amendment passes with a majority of 17.

Rishi Sunak and Benjamin Netanyahu will speak on the phone tonight, Sky News understands.

It comes after Mr Sunak told MPs yesterday during a statement to parliament following Iran's attack on Israel that he would be speaking to his Israeli counterpart "shortly".

After what No10 called said was issues with scheduling the call between the leaders, a time has now been set for this evening.

By Darren McCaffrey, political correspondent

Locked out and not allowed back in. That was the rather extraordinary position Nigel Farage and some conservative politicians found themselves today at a right-wing conference in Brussels.

The police's action provoked yet again arguments around free speech and extremism, but ultimately ended up creating major news too.

It wasn't meant to be that way.

The National Conservativism Conference is a frankly a fringe event. 

Yes it started five years ago, and previous guests have included Michael Gove and Jacob Rees-Mogg. 

This year Mr Farage and Suella Braverman turned up.

These are undoubtedly big voices on the right, but they weren't expected to create much news.

In fact, most of the limited coverage was likely to focus on the former home secretary's rather punchy attack on her old boss the prime minister and a setting out a case for leaving the ECHR.

Instead, the repeated actions from several district mayors in Brussels to ensure the event didn't have a venue took centre stage.

Explaining why he had brought in the police - the Mayor Emir Kir said some of the attendees hold anti-gay and anti-abortion views.

And writing on X claimed: "The far right is not welcome."

This unsurprisingly provoked any angry response from those there, including Mr Farage who told me: "Have you seen the people in the room? Does this look like a bunch of yobs to you? Far, far from it. 

"These are a lot of very respectable, very eminent people. I mean, we've got bishops here. We've got a prime minister of a country here. We've got a European royal family here. I mean, these are very respectable people. 

"There's also no protest outside of any significance at all. It's about closing down an ideology."

Irrespective of who is right and who is wrong, this latest skirmish in the constant battles around free speech was seized upon by the conference as the latest example of cancel culture.

Cancel culture in real time, as one claimed.

And the rather blunt use of the police - far from silencing those in attendance - merely only seemed to amplify their arguments.

Making it difficult not to conclude that if you wanted people to hear your views about cancel culture, the actions of the Brussels authorities only helped in that cause.

The government has lost a second vote in the House of Lords this afternoon on its legislation to rescue the embattled Rwanda scheme.

Peers voted on an amendment that says Rwanda "cannot be treated as a safe country" until the Independent Monitoring Committee - created by the treaty agreed with Rwanda - affirms that the mechanisms it creates have been fully implemented.

The result of the vote is:

• 266 in favour
• 227 against.

That's a majority of 39 in favour of the amendment.

Right now, Rishi Sunak is going to be thinking about his legacy.

Yes, yes, we don't know the outcome of the election, he's getting on with the day job, he's fighting for another five years.

But Rishi Sunak WILL be thinking about his legacy. What is it that will he be remembered for?

Now, there is an argument that one of his most lasting achievements as prime minister will be the smoking ban.

Tonight, MPs are voting on whether the legal age at which you can buy cigarettes should be increased by a year every year until it's effectively illegal.

It'll be happening when we're on air – and we'll bring you the result as they get it. Because something quite interesting is going on.

While this is a very popular policy with the public – and it's being backed by Labour – a lot of Conservative MPs are distinctively uncomfortable with it.

Freedom, according to them, includes the freedom to make bad choices as well as good ones. Banning things is simply un-conservative.

And we're going to be keeping a keen eye on the division lobbies too - because I've got a feeling that we could be seeing the next Conservative Party leadership contest play out tonight.

Who wants to burnish their freedom fighting credentials to the party faithful?

Penny Mordaunt? Kemi Badenoch? Suella Braverman?

Which division lobby will the next leader of the Conservative Party go down?

Watch Politics Hub With Sophy Ridge live on Sky News from 7pm.

Cabinet minister Kemi Badenoch has announced she will vote against Rishi Sunak's flagship legislation to ban smoking.

The business and trade secretary said in a statement on social media that while she thinks the PM's intentions are "honest", and praised him as a "leader who doesn't duck the thorny issues", she does not support his approach.

She wrote: "I have significant concerns and appreciate the PM making this a free vote. It gives me the opportunity to express my personal view, outside collective responsibility.

"The principle of equality under the law is a fundamental one. It underpins many of my personal beliefs.

"We should not treat legally competent adults differently in this way, where people born a day apart will have permanently different rights.

"Among other reasons, it will create difficulties with enforcement. This burden will fall not on the state but on private businesses.

"Smoking rates are already declining significantly in the UK and I think there is more we can do to stop children taking up the habit.

"However, I do not support the approach this bill is taking and so will be voting against it. "

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