A contract dispute is usually considered a breach of contract, meaning that a party failed to perform a duty or promise that they agreed to in the contract. Sometimes it is unavoidable to take contract dispute into the Court.
Litigation on contract disputes
A valid contract
There are three basic elements to make a valid contract:
Firstly, there must be an agreement, where someone (offeror) offers something, and the other person (offeree) accepts that offer. The offer made by offeror was accepted by the offeree.
Secondly, each party to the contract must give something in value (called consideration). This could be money, an item for sale or even someone’s skills and time. If there is no value from any party, this might not be a contract.
Thirdly, each party must willingly enter into a legally binding agreement.
The dispute over contract breach
Generally, there are the two types of breaches over contract disputes:
EXPRESS TERM breach
A breach of an express term within a contract occurs when an obligation has been explicitly defined within the contract. For example, a franchise agreement might state that the franchisee must pay the franchisor a $50,000 fee at the end of every month. If the franchisor fails to pay the full amount by the specified date, then it can be rightly said that the franchisee has breached the contract.
IMPLIED TERM breach
A breach of an implied term within a contract occurs when an obligation has been implied within the contract, but not specifically defined. This is a more complex type of breach and requires interpretation by a lawyer to determine if the term in question was actually implied. A term may be implied for several reasons: because of a previous court decision, by statute, accepted custom of the trade/industry or previous dealings between the parties. For example, an employment contract might state that the employee must abide by the company’s confidentiality policy. This implies that the employee should not leak confidential information about the company to outside parties. If the employee does so, then it can be rightly said that the employee breached the contract.
The common dispute over the contract
Some common types of contract disputes may include:
- Issues with drafting and reviewing a contract
- Offer and acceptance disputes
- Mistakes and errors concerning the terms of the contract
- Disagreements as to the meaning or definition of a technical term
- Fraud and coercion—there is no “meeting of the minds” if a person is forced or tricked into signing the contract
Even if a contract is properly formed, there may be disputes as to the performance of contract duties. If a party fails to perform their side of the bargain, it can cause a legal dispute. For example, if a seller fails to deliver goods that were purchased by the buyer, then the buyer my seek various legal remedies for “non-performance” of the sales contract.
Remedies for disputed contract
If one party breaches a contract, the other can take action and seeking remedies. There are a number of remedies for a breach of contract in New South Wales:
Remedies for repudiated the contract
Certain breaches will let you consider themselves free from their obligations under the contract. You can however keep the contract going and perform their part of it if you wish.
You can also refuse to perform your part, resist any action brought by the defaulting party, and take action against them for damages resulting from the breach or for an amount equivalent to the goods and services that were provided.
Remedies for Non-repudiated contract
Some breaches do not discharge the contract, so you can seek non-repudiation remedies:
- You can sue for specific performance. This is an order from the court specifically directing the party in default to carry out its obligations under the contract. This remedy is only available in cases where damages will not provide proper compensation for the breach of contract, such as contracts involving the sale of land.
- You can obtain an injunction. An injunction is a court order restraining a person from doing or repeating their wrongful conduct. If there are court proceedings pending, an injunction can also be granted where there is a real risk that the defendant may sell or otherwise deal with property that is the subject of the dispute.
- You can also sue for damages. An award of damages for breach of contract is to compensate with money the loss resulting from the breach. If no loss was sustained by the breach, nominal damages may be awarded if a legal right has been infringed.
Do I need lawyer for contract dispute?
Contract disputes can involve many different legal concepts. These can sometimes be complicated and difficult to understand.
There are often numerous resolutions can be reached and our lawyer will be able to provide you with all the options. As you know that going to court is not always the best solution for you.
Lawyer’s ability to think laterally and out-of-the-box will be crucial to you in reaching a satisfactory outcome and avoiding the costs.
When having a contract dispute, often there are many options available to minimise you lose and protect your interests. We can not only represent you in Court but help you to reach your best outcome from disputes.