Breach of Contract

BREACH OF CONTRACT AND THE REMEDIES AVAILABLE

As stated in our first article herein, breach and remedy clauses are two of the most important clauses to ensure compliance with a contract. As a result, special attention is to be paid when drafting and including these clauses into a valid contract.

BREACH

When parties bind themselves to a contract, they undertake to fulfil certain responsibilities and are aware that they can be held accountable for their actions or omissions (a failure to perform). If a party defaults in their obligations to act, or not act, the defaulting party would have committed a breach of contract.

A contract can be breached in one or more of the following ways:

By a Creditor (Mora Creditoris) – This situation arises when a debtors’ performance is dependent upon a creditor’s co-operation which is withheld.
By a Debtor (Mora Debitoris) – Where the debtor fails to perform timeously.
Positive Malperformance – This breach occurs when a party performs but not in accordance with the standards contracted to.
Prevention of Performance – When one parties conduct renders it impossible for the next party to perform.
Repudiation – When a party negates on their contractual obligations, verbally or through their conduct, without lawful reason to do so.

A breach of contract in one of the above manners results in one or more parties to a contract suffering damages for which they may require compensation in the form of one of the remedies below.

REMEDIES

Remedies that aim to keep the contract alive:

Exceptio non adimpleti contractus – Where the aggrieved party refuses to perform until the defaulting party performs.
Specific performance – When the aggrieved party approaches a court of law for an order compelling the defaulting party to perform in terms of the contract

Remedies to cancel a contract:

Cancellation and Restitution - The aggrieved party can elect to cancel the contract once notice of same was served on the defaulting party. With this remedy, all parties would need to be placed in the position they would have been in had they not entered into the contract.

General Remedy:

Compensation – A party can claim compensation in conjunction with some of the remedies above. However, an aggrieved party would have to prove the damage suffered and the quantum thereof.

Should you require assistance with the cancellation, drafting or enforcement of a contract, please do not hesitate to contact our offices on 011 646 8411 or email us.

Mayuri Maharajh