Unit 48-LO3 Illustrate the impact of contractual breakdown and suggest remedies available for breach-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

There are three ways to fix a contract that has been broken. One way is by terminating the contract. This means one party can end the contract and get out of it. There are three types of remedies for the breach of a contract.

• Restitution means that the person who broke a contract has to give back the things they got from the other person.
• Rescission means that one side of a contract is allowed to get out of it and return both people’s performance on or arising under this agreement.
• Historically, rescission was used, but today this remedy is rarely used because courts have found that damages for rescission should be reduced to reflect any profits made because of its repudiation.

Also Read: Evaluate the elements of the tort of negligence and remedies available

Performance of a contract:

Definition of performance contract

A performance contract is an agreement in which a company pays the customer for feedback about their product. You might want to talk with customers before you sign this contract.

During a business operation, if the owner needs to know about customer feedback, they need to be aware of the structure of what will be asked and how it will affect their business. There are two main types: direct feedback (which is when customers ask for help) and indirect feedback (when customers fill out surveys). Both types can provide valuable information to the company.

Different types of performance:

Actual partial performance

Partial performance is when one person does a few things in an agreement and the other person does not bother doing any of the things.

For example, if two people agree to do three days worth of work, but one person only does one day while the other person doesn’t do anything at all, it would be agreed that there was partial performance.

Substantial Exceptions

Sometimes people who do bad things have to get a lighter punishment. There are two types of substantial exceptions, one for offenders who are young, and another for people who commit more than one crime.

Divisible contract

A contract is considered to be divisible if it has been created for part of the agreement. If someone is only bound to a contract for part of it, then it will not be enforceable in many jurisdictions because there would still be more parts of the agreement that have not been completed.

Valid reasons for non-performance

The three main reasons for non-performance are:

• Disinterest in the field of law.
• Lack of work ethic.
• Being in a bad environment that you feel is taking away from your performance and happiness as an individual.

It is usually not the person’s fault that they cannot succeed in this profession. It might be good to help them find ways to try again or find a new job for their interests and personality type.

Breach and types of breach:

Breach, serious breach, and different types of breaches necessary to end a contract

A breach is something that breaks a promise or an agreement. The breaking of the promise may be either implied, or it may be explicit. If you have not made public that there has been a breach, then you have a serious breach. If you make it public and take action accordingly, then the contract will be dissolved. Breaches can also happen in different ways: material breaches and immaterial breaches.

A material breach happens when one party breaks their agreement and can no longer meet their obligations to the other party. If the other party wants to take legal action, they can. If it is a small breach, then it’s an immaterial breach because it does not break the agreement that much.

Remedies for breach of contract:

In contract law, the remedies for a breach of the agreement are either damages or injunctive relief

Damages are when a person has to give money to someone else because they broke something. There are two types of damages: nominal damages and liquidated damages.

Nominal damages –These are lawsuits for injuries and they do not need proof that the injuries were caused by the defendant’s actions. These are also lawsuits where it is difficult to prove entitlement to more money, like $100-$500.

Liquidated damages- This is a very specific sum of money. It is written in the contract and if it happens, you would get that amount of money. For example, if you were late on your loan payment for 10 months, you would have to pay $30,000.

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