T017 Contract Practice - Remedies For Breach Outsde The Contract Rics Apc

Front 1

What are the three main remedies for breach of contract at common law?

Back 1

Damages
Set off and abatement
Repudiation

Front 2

What can damages be awarded for?

Back 2

Any breach of a contract whether serious or minor

Front 3

How are they assessed?

Back 3

To put the innocent party back in the position they would have been in had the breach not occurred

They are compensatory not punitive

Front 4

What conditions have to be met before damages are paid?

Back 4

Actual loss has to have been suffered
This has to stem directly from the breach
Mitigating measures should have been taken by the innocent party

Front 5

What is set off?

Back 5

Where the employer refuses to meet a contractor’s claim for payment because they have a cross-claim that would reduce or cancel out the payment

Front 6

What is equitable set off?

Back 6

Where the claim and counter claim are closely linked e.g. under the same contract

Front 7

What is abatement?

Back 7

Where the employer asserts that the contractor’s claim is not worth the value they are claiming i.e. due to physical defects to the work

Front 8

What is repudiation?

What is it a remedy for?

Back 8

Termination of a contract at common law

Very series breaches of contract

Front 9

How can the common law right to repudiate arise?

Back 9

In two situations:
1) One party indicates that they have no intention of fulfilling their obligations
2) One party commits such a serious breach of contract that they can be deemed to have no intention of fulfilling their obligations

Front 10

What employer breaches constitute a serious enough breach to justify repudiation?

Back 10

Refusal to give possession of the site or wrongful ejection
Continued refusal to pay sums due
Withholding of certificates (depending on seriousness)
Hindrance of contractor e.g. not providing necessary drawings (depending on seriousness)

Front 11

What contractor breaches constitute a serious enough breach to justify repudiation?

Back 11

Abandonment or unjustified suspension of the works
Very serious defects
Extreme delay where time is of the essence

Front 12

What are the options if any of these occur?

Back 12

The innocent party must choose whether to affirm or repudiate the contract

Front 13

Can you change your mind?

What does this mean?

Back 13

No, once notice (or behaviour) is given either way it is irrevocable

That the party must act clearly and without delay

Front 14

What are the consequences of repudiation?

Back 14

Both parties are released from their obligations under the contract
BUT the contract provisions regarding liability, assess damages and dispute resolution are still valid

Front 15

How does repudiation at common law differ from termination under the contract?

Back 15

Termination under the contract only terminates the contractor’s obligation to carry out the works and does not release the parties from any further obligation
The contractor lays out detailed procedures to be followed to terminate AND the consequences of termination

Front 16

Can the parties choose which method to use?

Back 16

Case law not entirely clear, but assumed yes
BUT the innocent party must elect one remedy or the other – cannot combine elements
AND if they want to use the contractual remedies they MUST follow the specified procedures
If they don’t they’ll have to rely on the common law rights
BUT this can only be done if the contractor’s breach is serious enough

Front 17

What is ‘frustration’?

Back 17

Termination at common law due to neutral events that have made the performance of the contract impossible, illegal or radically different from that which was envisaged, due to the fault of neither party.
Only applicable where this is not dealt with by the contract