If your business is involved in a dispute with an individual or another business that has breached a contractual agreement, it is advisable to seek legal advice from an experienced breach of contract solicitor in London. Early legal guidance can help protect your commercial interests and identify the most effective course of action.
Under the Limitation Act 1980, a claim for breach of contract must generally be commenced within 6 years of the date of the breach, or within 12 years where the contract has been executed as a deed. Before court proceedings can take place, however, the parties are expected to comply with the Practice Direction – Pre-Action Conduct and Protocols. This typically involves sending a Letter of Claim, exchanging relevant information and evidence, and making genuine efforts to resolve the dispute without litigation.
Successfully pursuing a breach of contract claim requires a strategic, carefully managed legal process to protect your commercial interests and achieve the best possible outcome. Below, we discuss in more detail what steps must be taken with breach of contract claims.
Key Elements to Prove a Breach
To pursue a successful breach of contract claim, your business must be able to establish the following key elements:
- Valid contract: A legally binding and enforceable contract existed between you and the other party.
- Breach: The other party breached one or more express or implied terms of the contract.
- Causation: The breach directly resulted in your business suffering monetary loss or other recoverable damage.
- Loss: Your business sustained a recoverable financial or commercial loss that was reasonably within the contemplation of the parties when the contract was formed and is not too remote to be recoverable.
The 4 Types of Contract Breaches
The manner in which the dispute is resolved depends on the severity of the breach:
- Minor breach: This type of breach does not substantially undermine the purpose of the contract. While the innocent party may be entitled to recover damages, the breach will not ordinarily give rise to a right to terminate the contract.
- Repudiatory or material breach: This type of breach is more serious as it goes to the heart of the contract and substantially deprives the innocent party of the benefit of the agreement. In this instance, the innocent party may be entitled to terminate the contract and seek damages.
- Anticipatory breach: In this instance, if the other party clearly indicates, before performance is due, that it does not intend to perform its contractual obligations, the innocent party may be entitled to accept the repudiatory breach, terminate the contract, and commence legal proceedings without waiting for the breach to occur.
- Actual breach: This is the most common form of breach and arises where a party fails to fulfil its contractual obligations on or before the date required under the terms of the contract. Here, depending on the seriousness of the non-compliance, the breach may be regarded as either a material or minor breach, with the available legal remedies varying accordingly.
The Pre-Action Protocol
As mentioned before, UK law requires that pre-action protocols be followed before litigation can occur. In fact, courts in England and Wales penalise parties who do not first follow these protocols but instead move straight to litigation. According to the Ministry of Justice Pre-Action Protocols, you must do the following:
- Letter of Claim: Prepare and serve a concise Letter of Claim setting out the relevant facts, the amount claimed, and the basis upon which the claim has been calculated. Here, a contract dispute solicitor in London can help you prepare and serve the letter.
- Time to investigate: The defendant must be afforded a reasonable opportunity to investigate and respond to the alleged breach of contract. Whilst a 14-day period is generally appropriate for straightforward matters, more complex commercial claims may warrant a response period of up to 3 months.
- Alternative Dispute Resolution (ADR): Before initiating formal court proceedings, parties are encouraged to consider ADR, including mediation, as an effective means of resolving disputes without the need for litigation in the Civil and Small Claims Courts. ADR can also help to reduce the costs of resolving a dispute, as court proceedings are often time-consuming and expensive.
Remedies for Breach of Contracts
If your case is successful, you may be awarded the following:
- Damages: Financial compensation designed to restore you to the position you would have been in had the contract been performed in accordance with its terms.
- Specific performance: The court can order the breaching party to perform their contractual obligations. However, this remedy is rarely granted and only in limited circumstances where damages could not provide an adequate remedy.
- Rescission: A remedy that sets aside the contract and, where possible, restores the parties to their pre-contractual positions. Rescission is generally available only in limited circumstances, including cases involving misrepresentation or fraud.
- Restitution: Here, the breaching party is required to return any benefit received under the contract, preventing unjust enrichment at the expense of the innocent party. It may be awarded alongside rescission or, in some circumstances, as a standalone remedy.
- Rectification: This remedy allows the court to amend the terms of a contract so that they accurately reflect the parties’ true intentions. It is typically available where the written agreement does not reflect the parties’ agreement due to a common mistake or, in certain circumstances, misrepresentation or fraud
Are You Dealing with a Dispute Regarding a Breach of Contract?
If your business is facing a breach of contract dispute, obtaining advice from a specialist breach of contract solicitor in London can help protect your commercial interests and secure the best possible outcome. Early legal intervention can be instrumental in resolving the dispute efficiently, whether through negotiation, alternative dispute resolution or court proceedings. Contact our team at GSP Law for trusted legal advice and practical and cost-effective solutions.
