Business Law Semester 2: Remedies for Breach

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Questions and Answers

What can a non-breaching party seek in addition to damages for breach of contract?

Delay in performance

Termination of the contract (correct)

Loan extension

Increased damages

Which type of breach is characterized by a complete failure to perform contractual obligations?

Partial performance

Anticipatory breach

Non-performance (correct)

Late performance

What distinguishes substantial performance from less than substantial performance?

Substantial performance always meets deadlines.

Substantial performance fulfills all terms of the contract.

Less than substantial performance is a complete breach.

Less than substantial performance offers some benefits. (correct)

Which of the following is considered a condition in a contract?

A term that is fundamentally essential for the contract Signup and view all the answers

What occurs in an anticipatory breach?

One party expresses unwillingness to perform before the time for performance. Signup and view all the answers

Which of the following is NOT a type of contractual term?

Anticipatory terms Signup and view all the answers

In the case of Associated Newspapers v Bancks, what was the main issue regarding the contract?

The location of the cartoon's publication changed. Signup and view all the answers

What signifies the importance of a condition in a contract according to the Tramways test?

The promise was so crucial that the promisee would not have entered the contract without it. Signup and view all the answers

What happens if there is an anticipatory breach of the entire contract?

The non-defaulting party may terminate the contract. Signup and view all the answers

What is necessary for a breach of an innominate term to permit termination of the contract?

The breach must be serious and deprive substantial benefit. Signup and view all the answers

In the context of contractual terms, what distinguishes a warranty from an innominate term?

Warranties do not cause substantial loss when breached. Signup and view all the answers

What was the essential issue in the case of Bettini v Gye?

Whether attending rehearsals was a condition or a warranty. Signup and view all the answers

What legal remedy is typically available for a breach of warranty?

Damages. Signup and view all the answers

What must a party demonstrate to terminate a contract due to a breach of a warranty?

Evidence of intent to repudiate the contract. Signup and view all the answers

In the event of an anticipatory breach, what can the non-breaching party do?

Terminate the contract and sue for damages. Signup and view all the answers

What must a non-breaching party do to exercise the right to terminate a contract?

Elect whether to terminate the contract. Signup and view all the answers

What type of term would typically not allow for terminations if breached?

A warranty. Signup and view all the answers

In the case of Holland v Wiltshire, which breach did not lead to the loss of the right to terminate by affirmation?

H's announcement of not proceeding with the sale. Signup and view all the answers

What happens when a party affirms a breach of contract?

The right to terminate the contract is lost. Signup and view all the answers

What was the specific request made by H in the Holland v Wiltshire case?

To extend the payment date. Signup and view all the answers

If a party knows about a breach and continues with the contract, what is the result?

They lose the right to terminate the contract. Signup and view all the answers

What classification did the court assign to the 'rehearsal promise' in Bettini v Gye?

Warranty Signup and view all the answers

What was the primary reason B could terminate the contract with AN?

AN breached its promise to publish the cartoon prominently. Signup and view all the answers

In the case of Cehave v Bremer, why could C not reject the goods and terminate the contract?

The breach was not serious enough. Signup and view all the answers

Which condition must be met for the breach of an intermediate term to allow for termination?

The breach must substantially deprive the non-breaching party of the benefit. Signup and view all the answers

What did the Tramways test determine regarding the contract between B and AN?

The term regarding publication was a condition. Signup and view all the answers

What was the main reason that G could not terminate the contract in Bettini v Gye?

The rehearsal promise was not a condition. Signup and view all the answers

What kind of breach allows for the right to terminate a contract?

Non-performance of a condition. Signup and view all the answers

Which of the following statements best describes the term regarding the pellets in Cehave v Bremer?

It was an intermediate term subject to specific conditions. Signup and view all the answers

In the case of Holland v Wiltshire, what was the finding regarding the payment date?

It was ruled a condition of the contract. Signup and view all the answers

What implication does the classification of a term as 'intermediate' have in contract law?

It permits different outcomes for minor and serious breaches. Signup and view all the answers

What constitutes an anticipatory breach of a condition?

The promisor demonstrates inability to perform. Signup and view all the answers

In terms of breach consequences, which of the following is NOT true regarding a warranty?

Breach of warranty requires proof of substantial consequential loss. Signup and view all the answers

What was the essential aspect of the contract between B and AN concerning the cartoon?

The location of publication within the comic section. Signup and view all the answers

What aspect of B's reasonable excuse for missing rehearsals was relevant in Bettini v Gye?

It had no relevance to the court's decision. Signup and view all the answers

Why did W in Holland v Wiltshire have the right to terminate the contract?

H failed to perform by the newly set extended date. Signup and view all the answers

How does less than substantial performance of a condition affect a contract?

It gives the non-breaching party the right to terminate. Signup and view all the answers

Study Notes

Termination: Overview

Non-breaching party can seek damages or terminate the contract.
Termination eligibility depends on the type and nature of the breach.

Types of Breaches

Non-performance: Complete failure; no action taken (e.g., Varley v Whipp).
Partial performance: Any performance less than complete; includes:
- Substantial performance: Plaintiff still receives expected benefits.
- Less than substantial performance.
Late performance: Breach occurs when obligations performed after due date.
Anticipatory breach: Party indicates inability or unwillingness to perform before due date.

Types of Contractual Terms

Conditions: Fundamental importance; if not fulfilled, can terminate contract.
- Established by the Tramways test.
Warranties: Lesser importance; breach permits damages but not termination unless it amounts to repudiation.
Innominate/intermediate terms: Breach can permit termination if serious and deprives substantial benefit.

Breach of Conditions

Associated Newspapers v Bancks: B terminated due to AN's breach of front-page promise; condition was fundamental, allowing termination.
Holland v Wiltshire: Timely payment condition; failure to perform entitled W to terminate contract.

Anticipatory Breach of Conditions

Recognized if context indicates inability or unwillingness to perform.
Hochster v de la Tour: H could terminate contract due to anticipatory breach, allowing for damages.

Breach of Intermediate/Innominate Terms

Term may cause serious loss yet be breached without serious consequence.
Cehave v Bremer: C could not terminate for minor breach as substantial benefit remained intact.

Electing to Terminate

Termination requires active choice; non-breaching party must communicate intent to terminate.

Loss of Right to Terminate: Affirmation

Affirmation occurs when a party continues after acknowledging breach.
Right to terminate can be lost if no action is taken post-breach acknowledgment.

Case Study: Holland v Wiltshire

Three breaches by H:
- Initial failure to perform: W's right to terminate lost due to affirmation.
- Failure by the first extension: Again, affirmation led to loss of termination right.
- Announcement of non-performance constituted repudiation, allowing W to terminate contract.

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Description

This quiz covers Topic 7 on Remedies for Breach in Business Law. It explores the options available to the non-breaching party, including termination of the contract based on the type and nature of the breach. Test your understanding of contract law and the implications of breaches of agreement.