Contracts are written documents (or verbal agreements) that contain binding promises. These promises can cover all types of arrangements such as: delivery of goods, performance of services or a combination of both typically in exchange for some form of compensation. They hold each party accountable to certain terms and conditions and can be as simple as a single signed document or as complicated as a multiparty, multipage document comprised of hundreds of pages.
While they attempt to offer us security that things will go as planned, there are a number of circumstances when things do not go as planned and then it may be necessary to terminate these legal agreements on proper grounds. While there can be many reasons for a contract being terminated / discharged some of the commonly encountered ones include: - performance, agreement, breach, frustration and repudiation.
Performance: This happens when there are problems or issues in performing the duties, obligations or services agreed upon. For instance, and taking the example of a building contract, if the contractor does not do the work to the satisfaction of the owner or if the owner prevents the contractor from doing the work there may be performance issues. Sometimes there is partial completion, leading to questions about whether partial payments or “quantum meriut” should be allowed or not.
Agreement: There are many examples of when the parties involved in a contract agree to bring a contract to an end by mutual agreement. This is a consensual form of discharge and may be subject to specific terms such as a deed of release.
Breach: Simply put, a breach of contract occurs when one or more party fails to uphold their part of the bargain. Examples are numerous and range from the trivial failure to deliver goods on time to the more critical failure of not delivering goods at all. Naturally, a breach can occur in more ways that can be stated here.
Frustration: Sometimes circumstances outside the control of either party can make it impossible to complete the terms of the contract. For example, a natural disaster could impede efforts on a large construction project. Or an unforeseen illness can make a business owner unable to deliver on the services that were promised. Much depends on the wording of the contract though since these examples may not amount to frustration in every case.
Repudiation: This is when one party makes it clear that it is unwilling or unable to perform. The other party can then accept the repudiation or insist on performance. This is best done on legal advice.
If your contractual arrangements have gone off the rails, then it is important to fully understand your rights and how to go about exercising them in accordance with the law. If you would like more information on sorting out a contracts dispute or contractual problem, then our litigation solicitors are here to see how they can help you. To book a consultation, call us at +61 2 8644 0663
Other, litigation and breach of contracts insights:
* Disclaimer:- This publication contains general information which may not suit your particular needs or circumstances. It may be summarised and include generalisations. Details that may be important in your specific circumstances might not be included. Litigant strives to ensure that the information in this publication is accurate and up-to-date, but does not represent or guarantee that it is accurate, reliable, current, complete or suitable. You should independently evaluate and verify the accuracy, reliability, currency, completeness and suitability of the information, before you rely on it. The information in this publication is not legal or other professional advice. You should obtain independent legal or professional advice that is tailored to your particular circumstances if you have concerns. To the maximum extent permitted by law, Litigant excludes liability for any loss, however caused (including by negligence), relating to or arising directly or indirectly from using or relying on any content in this publication. Litigant asserts copyright over the content of this publication.