Contracts come into existence more often than people may realise, and simply because something is not written down does not mean that a contractual obligation has not arisen – nor that it cannot be breached.
Although some contracts will only operate if made in writing, many agreements come into existence on little more than a conversation or a short exchange of emails.
Although many parties will be aware that they are at risk of breaching their contractual obligations long before they acually do, often this is not discussed with the other party to the contract until after the breach has occurred – leaving limited options open to the parties to renegotiate the obligation or find a route of compromise. This can lead to serious and costly ramifications, particularly if there are a chain of agreements / obligations.
Whether you are looking to recover money, goods, compel a party to comply with a contractual obligation, defend against allegations of breach of contract, or are seeking to extract yourself from a contract you now cannot comply with, Bishop & Sewell have a team of lawyers able to advise you on the options which are available to you.
This will depend on what obligation has been broken, and whether there are any contractual mechanisms which need to be followed in this instance. Premature termination could actually lead to you being in breach of contract, potentially to a greater liablity than the originally defaulting party.
Depending on what the breach is, and what you are seeking to achieve, you may be able to obtain a Court Order forcing them to comply with their obligations.
Some contracts will make provision that in the event of early termination, the terminating party must pay a specific amount, or for a further period. The Court will consider a distinction between clauses which are considered ‘penalty clauses’ and those which are considered ‘liquidated damages’ clauses. In some instances they will be enforceable, in others they will not. If you have any questions over whether you can avoid these provisions / enforce these provisions you should seek legal advice.
First, any party thinking of commencing Court proceedings will need to check the contract for a jurisdiction clause (whether they are considering using the correct Court), a governing law clause (making sure they are relying on the correct law) and a dispute mechanism clause (what to do in the event of a dispute). Finally, you will need to consider whether any of the pre-action protocols apply. There will be some instances (such as seeking to freeze a party’s assets) where you will not want them to be aware of any proceedings in advance, but ultimately issuing too early, in the wrong Court, or via the wrong process could lead to the steps being invalid, premature or expose you to your opponent’s costs.
