f4中博基础班02-acca讲义part b chapter5breach of contract and remedies

1、Chapter 5. Breach of contract and remediesI.Discharge of contractDischarge means the contract comes to an end. Contracts are dischargedhe following ways:Agreement. Where both parties agree to terminate the contract and the agreement ipported byconsideration.Frustration. A contract,sible to perform w

2、hen it is formed, will be discharged for frustration if itsubsequentlyes imsible to perform due to circumstannotributable to eitharty.Performance. Where all contract terms are performance, the contract will be discharged.Breach of contract. Where one party fails to meet his contractual obligations.I

3、I.Breach of contract1.DefinitionA party is said to be in breach of contract where, without lawful excuse, he does not perform hiscontractual obligations precisely.Lawful excuses for non-performance include:A.A force majeuret makes performance imsible.B.One party to the contracs tendered performance

4、but this has been rejected.C.The otharty has made it imsible for him to perform.D.The contracs been discharged through frustration.E.The parties have permitted non-performance.A breach of contract itself will not discharge the contract. It will give rise to a secondary obligation to paydamages to th

5、e innocent party, and the primary obligation to perform the contracts terms remains.However, if the party in defauls repudiated the contract, the innocent party may choose to dischargethe contract and sue for remedies.Repudiation means a breach of contract which entitles the innocent party to end th

6、e contract if he sochooses.- 53 -2. Types of breach2.1. Repudiatory breachA repudiatory breach occurs where a party indicates, either by words or by conduct,t he does notend to perform his contractual obligations or commits a breach of condition or a breach of innominateterms which has serious conse

7、quenfor the innocent party.When there is a repudiatory breach, the innocent party has a choice:A.He may choose to treat the contrarepudiated by the other, recover damages and treat himselfas being discharged from his primary obligations under the contract.B.He has the right not to accept the breach

8、and carry on with his performance in order to claim the fullprice under the contract once the due date for performance arrives.2.2. Actual andipatory breachActual breaay be non-performance or defective performance or some sement in the contractturning out to be untrue. It usually occurs on the due d

9、ate for performance.ipatory breach occurs where one party, prior to the due date for performance, shows an(expressly or impdly) to repudiate the contract.entionA.Expressipatory breach: it occurs where a party actually sest he will not be performinghis contractual obligations: Hochster v De La Tour 1

10、853 (The defendant agreed in April to employ theclaimant as his courier for a foreign tour commencing on June 1. On May 11 he wrote to him sayinghe had changed his mind about the tour and therefore would not require a courier.).tB.Impdperformance imipatory breach: it occurs where a party carries out

11、 some acts which makesible: Omnium Entrises v Sutherland 1919 (The defendant agreed to hire a shipto the claimant. Before the hire period was due to commence, the defendant sold the ship.).- 54 -同意将船租给。在租期开始前，将船售出（给第）。认为，售船的行为在四月同意聘请 作为其六月一日开始的外国游的导游。在五月十一日， 写信通知 ，“主意已改不需要你的服务了”。 的行为 明示预期违约，立即解除合同并要

12、求 支付损害赔偿金。2.3. Remedies foripatory breachI.Whenipatory breach takes place the innocent party can treat the contradischarged andsue for damages immediay on receipt of the notification of the othartysention to repudiate thecontract, without waiting for the actual contractual date of performance: Hochs

13、ter v De La Tour 1853.II.Alternatively, the injured party may at his option allow the contract to continue until there is anactual breach.he latter instance, he is entitled to perform the contract and claim the agreed contractprice: White & Carter v McGregor 1962 (The claimant agreed to advertise th

14、e defendants business forthree years on plates attached to litter bins. The defendant cancelled the contract on the same dayt itwas made. The claimant nevertheless manufactured and displayed the plates as originally agreed, andclaimed the full amount due under the contract. The court heldt the claim

15、ant was entitled to do so.).III. Common law remedies1. DamagesDamages are a common law remedyended to restore the party who haffered loss to the sameition he would have been in if the contracd been performed.The pure of damages is compensatory. It is not designed to punish the contract-breaker by de

16、privinghim of his ill-gotten gains: Surrey County Council v Bredero Homes (SCC sold some land to BH and inthe contract of saH covenanted to build no moren 72 houses on the plot. In deliberate breach ofcontract BH built 77 houses. SCC claimed damages equal to the profit BH had made on the extra house

17、s.The court heldt sinCC had not suffered any loss, the damages recoverable had to be nominal.).- 55 -SCC 将一块地出售给 BH，合同约定 BH 在地上建造的房屋不得超过 72 幢，但 BH 故意违约建造了 77 幢房屋。SCC 在向向 BH 主张违约责任时，要求 BH 赔偿相当于 BH 在 5 间房上所取得利润的损害赔偿金。认为，因为 SCC 未受到任何实际损失，所以损害赔偿金将是一个象征性的数字。同意为提供 3 年服务。当日签约当日就取消了合同（违约）。继续按约定履行了合同，并向主张合同约

18、定的应付价款。认为，继续履行合同，因为的预期违约行为本身并不导致合同终止。默示预期违约，可以立即主张损害赔偿，无须继续等到租期开始之时。2. Liquidated damages and penalty clauses2.1. Background:To avoid later complicated calculation of loss, or disputes over damages payable, the parties usuallyinclude up-frontheir contract a formula for determining the damages payabl

19、e for a breach of contract.2.2. Definitions:A.Liquidated: it means settled or determined by the contracting parties.B.Damages: it is a sum of money awarded by a court as compensation for a tort or a breach ofcontract.C.Liquidated damages: a sum fixed in advance by the parties to a contrathe event of a breach.the amount to be paid inD.Unliquidated damages: they are damages fixed by the court.2.3. Distinction:3. Assessment of unliquidated damages:3