Breach of Contract
Igor Sterzhantov©2011
Breach of Contract
By Igor Sterzhantov©2011
www.lawandsea.net
Introduction................................................................................................................................................... 1
Strict contract ............................................................................................................................................ 1
Duty to exercise due care ......................................................................................................................... 2
When failure to perform is not a breach ................................................................................................... 2
Effect of Breach ............................................................................................................................................. 3
Introduction
Under a breach of contract is usually understood such state of affairs between the contracting parties
when one of them without lawful excuse fails or refuses to perform his contractual obligations. A breach
is also deemed to be committed when performance rendered by a party to contract is defective, or a
party disables himself from performing.
If a party either renounce the contract or incapacitate himself before the date when performance is due,
it is said that he commits an anticipatory breach of contract.
It is not always easy to establish breach of contract. Sometimes there are reciprocal claims that another
party committed a breach and in some cases the existence of breach itself is a matter of dispute.
Moreover, not every failure to perform amounts to a breach of contract.
Liability for breach of contract is generally strict, but it may also be is based on some misconduct or fault,
such as fraud, want of due care or due diligence.
Strict contract
Depending on a standard of duty which a party has agreed to assume under the contract he may find
himself liable for breach even "without what one might call fault on their part"1. Duties of this kind are
strict and were described by Lord Edmund-Davies in Raineri v Miles [1981] AC 1050 at 1086 as below:
It is axiomatic that, in relation to claims for damages for breach of contract, it is, in general, immaterial
why the defendant failed to fulfil his obligation, and certainly no defence to plead that he had done his
best.
1 Per Roskill J in Inca Compania Naviera S.A. and Commercial and Maritime Enterprises Evanghelos P. Nomikos S.A. v
Mofinol, Inc. (The President Brand), [1967] 2 Lloyd's Rep 338
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Breach of Contract
Igor Sterzhantov©2011
Examples of strict liabilities are: duty of the seller to make delivery, duty of the buyer to pay price for the
goods, duty of the charterer to provide cargo and duty of the shipowner to provide a seaworthy vessel
under the common law. Some obligations not absolute under the common law can be made strict by
express provisions in contract2, e.g. charterers’ obligation to pay hire in advance. The general rule is that
liability is strict.
Duty to exercise due care
Where a contract provides for supply of services only, such for example as solicitors, architects or
doctors, where no guaranteed results possible to achieve, it is usually imposes duty of care only. This
standard of duty limits person’s undertaking in performing his services to one of exercising of reasonable
care and skill.
An example can be found in section 13 of the Supply of Goods and Services Act 1982 which states that:
In a contract for the supply of a service where the supplier is acting in the course of a business,
there is an implied term that the supplier will carry out the service with reasonable care and
skill.
In instances when risks of negative outcome is very hard to ascertain a duty to exercise reasonable care
and skill can be discharged even when services provided resulted in dramatically negative results. This is
so, because it was held that to establish negligence it is insufficient to rely on the doctrine of res ipsa
loquitur but exceedingly strong evidence3 would be required.
When failure to perform is not a breach
There is no breach committed when someone buys a theatre ticket but does not go to see performance.4
This is an example of so-called unilateral contract, i.e. a contract in which one side,5 in our case a person
who bought a ticket, does not make any counter-promise to act, i.e. fact of a ticket purchase does not
attach an obligation to attend the performance, it is therefore at purchaser’s discretion whether to go to
there or not.
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2 Arcos Ltd v Ronaasen & Sons Ltd [1933] AC 470, HL, case concerning to sale of staves of half-inch thickness. On
delivery only 5% of staves complied with contracted description, but other 95% nearly all less than nine-
sixteenth inch thickness. Otherwise staves were merchantable for their intended purpose. The House of Lords
held that the buyer entitled to reject staves as not complying with their description.
3 Per Mocatta J in Stafford v Conti Commodity Services Ltd [1981] 1 All ER 691 at p.697
4 See also an old example: Rogers v Snow (1573) Dalison 94
5 The ticket holder is an offeree and the theatre is an offeror.
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