Business Law

Business Law



Business Law

Introduction

A contract is an agreement that is enforceable by law. Modern business could not exist without such contracts. Most business transactions involve commitments to furnish goods, services, or real property; these commitments are usually in the form of contracts. Use of the contract in business affairs ensures, to some extent, the performance of an agreement, for a party that breaks a contract may be sued in court for the damages caused by the breach (Stone R, 2002). Sometimes, however, a party that breaks a contract may be persuaded to make an out-of-court settlement, thus saving the expense of legal proceedings. A clause may be inserted into a contract, which aims to exclude or limit a party's liability for breach of contract or negligence. In this paper we analysed the case of Knarles and Barkley.

Analysis

Breach of contract is rather self explanatory but basically one not performing under the conditions set forth by the contract. The general nature of the breach has three conditions, expressed repudiation (a party expresses that it will not perform), and implied repudiation (a party implies that it might not perform) and fundamental breach (a breach the goes right to the core of the agreement). When dealing with Express and Implied Repudiation the rights of the injured party are they are released from future performance, they may or can receive damages for any loss(s) suffered and, finally they are given the option to wait until a date fixed for performance and then take action against the non-performance. The only exception to the rule is where a party has substantially performed a contract and is only entitled to damages for loss. In regards to the fundamental breach the rights of injured party is to treat the contract as though it was performed, no exemption clauses will protect the party who caused the breach (McKendrick E. 2003).

This case study is concerned with Contract, more specifically the materiality of a breach of contract, and the remedies thus allowable. In order to come to a conclusion in this area, we need to answer the question, what constitutes a material breach of contract? Once we have answered this by looking at relevant cases we will be in a position to apply this to the facts of the case study, and reach a reasoned conclusion. A contract is by definition, an agreement between two parties that creates legally enforceable rights and obligations on both parties. A breach of contract occurs when one of the parties to the contract breaks one or more of the stipulations of the contract (Koffman L. and MacDonald E, 2004).

There are many types of breach of contract, e.g. anticipatory breach, refusal to perform, cancellation of the contract, defective performance, and delay in performance. However, each example of a breach of contract given can give rise to many different remedies available to the innocent party. Such remedies include retention and lien, specific payment and interdict, and damages. Every breach of contract opens up a claim ...