We enter into contracts as part of our everyday lives – for example, when we buy food from the hawker centre, when we subscribe to a streaming service, or when we sign up for a mobile / cellular data service / package.
Most of the time, breaches of contracts are obvious, such as failing to pay your mobile service or utility bill, and most of time, these are easily remedied. However, there are times where the contract itself may be a bit more complex, and in turn, so does the breach of the contract.
When two parties enter into a contract, it gives rise to contractual obligations which legally binding on both the parties. From a simply conceptual perspective, when either of the parties fails to perform their legally binding obligation(s) without a legal reason, it can be considered to be a breach of contract. When that happens, the innocent party can initiate an action for breach of contract against the defaulting party.
Putting the above together, we get two simple basic elements in a breach of contract:
Failure to fulfil the obligation is sufficient to constitute breach of contract and it is not necessary to prove that the defaulting party has not taken reasonable precautions to avoid the breach.
In determining a breach of contract, it is thus necessary to understand what the express term required the defaulting party to do, i.e., what exactly was the defaulting party legally obliged to do. This is an exercise of contractual interpretation which may involve express terms or implied terms, and as such might require legal expertise and advice.
A lawful reason can be contractual, or provided by law.
Some contracts provide for a mechanism for an extension of time in certain stipulated events – for example based on overall supply chain conditions. As such, where there is delayed performance, this may not be a breach if the provisions in the contract allow for such delayed performance in certain situations.
Another possible lawful reason is that of unlawful interference by a third party or the other contracting party itself – such interference can be considered the other party’s breach.
There are many forums for resolution of contractual disputes that typically depend on the value of the contract and the nature of the dispute.
If the parties seek to have the dispute and contractual issue formally decided, then court or arbitration proceedings would be the more appropriate forum. However, these tend to be more costly and confrontational.
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