BUSINESS AND LAW

Business and law

Business and law

Question 1

Introduction

Breach of contract basically means that Flavio & Marco of the terms and conditions laid out in a contract has been broken. Breaching a contract may lead to the contract breaking down completely and can easily lead to legal action and claims for damages in a law court.

Analysis

When any contract is made an agreement is formed between Flavio, Marco and Nuriya to carry out a service and payment for that service. If one of the parties fails to carry out their side of the agreement then the party can be said to be in breach of contract. As it happened with the Flavio, Marco case in which Nuriya is charge as Breach of contract can also occur if work carried out is defective or if Flavio & Marco party makes the other aware that they will not be carrying out the agreed work.

Breaches of contract can also include non payment for a service or not paying on time, failure to deliver services or goods, and being late with services without a reasonable excuse. Terms and conditions are a fundamental part of a legally binding contract and any broken terms can lead to breach of contract.

Damages can be awarded to an innocent party if a law court upholds that a contract has been breached. Damages will be used to compensate the Nuriya party for their loss due to the breach. These damages are usually a remuneration that will reflect the loss. For example, if an employer dismissed an employee unfairly then the employee could claim damages for loss of earnings under breach of contract. Damages can be awarded even if there has been no actual loss, the innocent party will then usually be awarded nominal damages.

If a dispute does occur due to breach of contract then the judge will need to decide that a legally binding contract does exist and that it has been breached. In some cases the contract may only be a verbal contract and there may be no actual written evidence that a contract was formed. In such cases a judge will need to go over the terms and conditions of the contract and clarify what actually took place in practice.

Entitlement to damages may be awarded if the innocent party can prove that a breach of contract took place. The innocent party must prove that there was a loss due to the breach and that the nature of the loss would lead to compensation. Remoteness of loss will also be taken into consideration by the courts and may include future loss that could reasonably occur from the contract being broken.

Other losses can include loss of profits, the cost of rectifying the breach and wasted expenditure. If disputes do end up in the law courts then the amount awarded may come down to how much documented proof the claimant has regarding financial loss. This can include actual records and document proof of financial loss due to the ...