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sample breach of contract letter

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					                                                              Contract management - Minor Works
                                                                              Sample Letter 15A


Breach of Contract (Show cause notice)
Notice to the Contractor
                                                                     Mentioned in Clause 15.1
Worked example

     21 June 2005


     The Manager
     XYZ Pty Ltd
     ACN 123456789
     1 Hope Street
     HOPETOWN NSW 2999


     Goodtown Public School
     Extensions to Administration Block
     Contract No. 2005999.


     Breach of Contract
     In my opinion, the Contractor has committed a substantial breach of the contract in
     that:
     1. In breach of General Conditions of Contract clause 15.1, the Contractor has failed
        to proceed with the work under the Contract at a reasonable rate;
     2. In breach of General Conditions of Contract clause 8, the Contractor has failed to
        comply with a direction of the Principal’s Representative, namely a direction dated
        5 June 2005 requiring the Contractor to remove asbestos from the Site; and
     3. In breach of General Conditions of Contract clause 5.8, the Contractor has failed to
        provide evidence of insurance for approval by the Principal’s Representative by
        notice in writing dated 3 June 2005.
     Please provide reasons why the Principal should not take further action under the
     provisions of General Conditions of Contract clause 15.5 to terminate the Contract, or
     under the provisions of clause 15.4, to take over the uncompleted Works.




      H. Grey
     H. Grey
     Principal’s Agent
     for the Principal


Guide Notes
1. Failure by the Contractor to proceed with the Works at a reasonable rate is a breach of
   contract by the Contractor.
2. The Principal’s Agent must not issue such a “notice” without the agreement of the client
   agency and the Manager, Commerce Dispute Resolution Unit. The “notice” is issued on
   behalf of the Principal.
3. If the breach continues after a warning in the above terms, then the Principal may use
   General Conditions of Contract clause 15.5 to terminate the Contract, or clause 15.4 to
   take over the uncompleted Works.

				
DOCUMENT INFO
Description: A breach of contract is quite a serious offence as if it happens the contract in question can be declared null and void. Given the legal nature of it, its best that everything concerning a contract and any breaches is followed through formal channels. If someone believes a contract to be breached they should write a legal notifying the party in question that they believe the contract has been breached and they should state why. Depending on the severity of the breach, the consequences will vary. It can range from asking to simply not happen again to damages being paid. Typically a breach occurs in an employment situation. An employee has violated the contract is some way and now the employer has the right to tear up and cancel the contract. This happens with athletes when they misbehave and then the team sacks them. If the reverse happens and the employee is wronged they will ask to be recompensed as opposed to cancel the contract. They may be paid less then they should be – instead of canceling the contract they will ask for the money in question. But the outcome depends on the variables which will change according to the situation so best to look at this on a case by case basis.