LAW OF CONTRACT

Law of Contract



Law of Contract

Objective

This essay made to develop understanding of contract among Henry and

Tom as it applies to the practice of architecture. And also to develop what are required to enter a legal contract and how to avoid mistake.

Scope and Limitation

Basically, the essay only explains about the breach of contract, the case in this essay taken from the book of contract law.

Definition of Contract

A contract is an agreement which binds the parties concerned. In other words, a contract is an agreement which is enforceable by law. To have an agreement, there must be an offer and an acceptance to that offer.

Avoidance of Contract

MisrepresentationIn the negotiations leading up to a contract, many statements are made. Some statements become a term in the main contract and if untrue, there will be a breach of contract.

However, some statements do not become the terms of any contract and such statements are called `misrepresentations' an if untrue, do not result in breach of contract but a misrepresentation. In other words, a non-contractual representation which is untrue is a misrepresentation.

A misrepresentation is simply, a false statement, of a material fact, made by one party to another or which induces the other party to enter into a contract.

Discharge and breach

One party may, by reason of the other's breach, be entitled to treat himself as discharged from his liability further to perform his own unperformed obligations under the contract and to accept performance by the other party if made or tendered. The expression 'discharge by breach' is commonly employed to describe the situation where he is entitled to, and does, exercise that right. Nevertheless, discharge from liability is not necessarily coincident with a right to sue for damages. Any breach of contract gives rise to a cause of action; not every breach gives a discharge from liability.

Circumstances giving rise to breach

Three circumstances may give rise to discharge of a contract by breach. These are:

(i) renunciation of a party of his liabilities under it;

(ii) impossibility of performance created by his own act; and

(iii) total or partial failure of performance

What constitutes breach

It is hard to lay down a positive general rule to determine what constitutes failure to perform particular terms of a contract. The question that must be asked is whether the party in default had conducted himself in a manner amounting to abandonment of the contract or a refusal to perform it, having regard to the circumstances and to the nature of the transaction. A party must 'evince an intention not to be bound by the contract' in such a way as to lead a reasonable person to the conclusion that he does not intend to fulfil his part of the contract.

Anticipatory breach

A breach of contract, in any form whatsoever, always entitles the innocent party to maintain an action in a Court of Law. However, the breach may take two forms: anticipatory and actual. The defaulting party may repudiate the contract before performance is due or before it has been fully ...