contract - breach

effect of breach

express repudiation - One party clearly states that they will not perform their obligations.

Implied repudiation - One party fails to perform important parts of the contract, making it clear that they won’t or can’t complete their obligations.

anticipatory breach - tells the other in advance that they will not be able to perform.(end contract and sue)

substantial performance

if they have done most if the work, you have to pay them for what they have done

breach of condition vs warranty

condition (important)

the contract is contingent on the condition being met and it failed to be met

the innocent party can:

• End the contract immediately (terminate it).

• Sue for damages to recover losses.

example

• A famous singer signs a contract to perform at a major event.

• On the day of the concert, they don’t show up.

• The concert’s success depended on the singer, so this is a breach of condition.

warranty (minor)

If it is breached, the innocent party can only claim damages but cannot cancel the contract.

example

• You buy a brand-new car, and the contract states:
  "The car comes with free floor mats."

• When you receive the car, the floor mats are missing.

fundamental breach

worse than breach of condition because it destroys the entire contract’s purpose.

one party fails to perform a key part of the contract, making it impossible for the other party to get what they agreed to.

The innocent party can:

1. Cancel the contract immediately (terminate it).

2. Sue for damages to recover losses.

example

• You book a luxury hotel suite for your honeymoon and pay in advance.

• When you arrive, the hotel says they have no available rooms.

• You are left without a place to stay, ruining the contract’s purpose.

damages

When a contract is breached, the innocent party may be awarded damages

Monetary Compensation 💰

• The injured party is paid as if the contract was fulfilled.

Only Available If Foreseeable 👀

• The damages must be reasonably foreseeable at the time of the contract. aware of the ramifications if not fulfilled.

Duty to Mitigate Losses 🛠

• The injured party must try to reduce their losses instead of making things worse

types of damages

Liquidated Damages 💵 (Pre-Agreed Penalty)

• A reasonable penalty that the contract already specifies for a breach.

• Common in contracts for missed payments, delays, or cancellations.

Nominal Damages ⚖ (Symbolic Award)

• Given when a contract is technically breached, but there is no real financial loss.

• The court recognizes the breach, but only awards a small amount

Punitive Damages 🔥 (Punishment for Bad Behavior)

• Used to punish extreme dishonesty, fraud, or unethical behavior.