Breach of Contract Disputes

Most contract disputes occur when a party ‘breaches’ a term or condition that is written or implied in an agreement. A breach means the failure by one party to properly perform the obligations required under the contract, whether through a positive act or omission.

Our lawyers are experienced in contract disputes. We will explain your rights and obligations under the agreement and explore cost-effective and practical solutions. Where possible, we focus on alternative dispute resolution and negotiation. We aim to settle the matter quickly, avoid expensive litigation and preserve the relationship of the parties.

How do breach of contract disputes occur?

Disputes can occur in a range of contractual relationships such as supply agreements, licence and lease agreements, franchise agreements, partnerships and joint ventures, shareholder agreements, building and construction contracts, loan agreements and employment contracts.

A breach is said to occur where a party’s performance of the contract is inadequate, defective or untimely. However, it is often difficult to determine whether a breach has in fact occurred. The following circumstances are typical:

• The parties disagree on the interpretation of the contract’s terms and conditions – this is common where contracts are poorly drafted or contain ambiguous clauses.
• The agreement is silent regarding the alleged breach – in such cases a party will rely on the condition purportedly breached being ‘implied’ in the contract.
• The parties disagree on whether a contract even exists – this may occur where parties have failed to document their verbal negotiations, or the document relied on is incorrectly signed, witnessed, etc.
• The parties have verbally varied the terms of a written contract but failed to document the variation.

A contract may also be affected by various statutes. For example, there are laws governing standard form contracts which protect consumers and small businesses from unfair terms, generally where there is unequal bargaining power between the parties.

What are my options when somebody breaches a contract?

The remedy available for breach of contract depends on the type (or severity) of the breach and the surrounding circumstances. Some breaches can be resolved simply by negotiation. For instance, if a supplier delivers an incorrect item to its customer, the supplier can offer to replace the item with the correct one or refund the customer.

A material or fundamental breach occurs when a party is unwilling or unable to perform an essential condition of the contract – in other words the very substance of the contract is dishonoured.

Breach of an essential condition gives the aggrieved party a right to terminate the contract and seek compensation for damages.

The law surrounding contracts is complex and numerous circumstances may impact the options for resolving a breach of contract dispute. Some contracts contain dispute resolution clauses so it is important to consider these terms first when attempting to resolve a dispute.

Disputes can escalate quickly and become costly and protracted – the sooner they are resolved the sooner the parties can move forward with their business or personal affairs. Our aim is to protect your rights and mitigate any loss by providing practical and sound advice.