Contract Performance

Introduction

Any modern day organization requires the services of another party to facilitate its working. The other party may help in the provision of either goods or services, which are beneficial to the party. Therefore, in the provision of the goods or services, there must be a legally binding agreement between the parties so that should any party fail to meet his part of the agreement, the other party can seek legal redress to cover for any damages that may occur. In this case, a contract is the legally binding agreement.

A contract can be simply defined as a legally binding agreement to do or not to do something, and may be oral or written (Meiners, Ringleb & Edwards 2008, p. 223). Failure to meet agreements may warrant any of the parties to seek litigation measures against the other party. This paper will discuss the grounds within which the offended party may seek legal redress and obtain compensation due to breach of agreement by the other party.

Analysis

Substantial and inferior performance

A contract usually specifies the expected results relating to association between the parties entering into an agreement. Generally, a party involved in an agreement may breach a contract through several methods. The performance of the duties as dictated by the contract may fail to meet the required standards; here, inferior performance is the performance of the duties relating to the contract, which is far below the expected standards, thus, constituting a breach of the contract (Teller, 2010, p. 47).

However, the party’s performance may be slightly below the expectations of the other party mainly due to minor breaches, though this may be acceptable in some cases. Nevertheless, if the contract requires that performance should be perfect, this may be construed as breach of the contract and thus the other party can seek litigation measures, which will be successful (Teller, 2010, p. 47).

There are many situations where the breach of contract may not be admissible in court. If during the offer, the offerer did not clearly explain the terms of the contract to the other party, the contract is deemed invalid and hence litigation of its breach will be unsuccessful. In addition, if the offerer was not ready to be bound by the terms of the contract, the contract is also deemed invalid (Meiners, Ringleb & Edwards, 2008, p. 224). Acceptance of the offer needs to be unconditional, unequivocal and it should be properly communicated for the agreement between the tow parties to be valid (Meiners, Ringleb & Edwards, 2008, p. 227). However, if the above conditions are not met, the offer is deemed invalid and its breach would therefore lead to unsuccessful litigation.

Something of value must be exchanged between the parties entering into a contract for it to be valid. The valuable commodity may be money, property a good or a service. Therefore, if in a contract nothing of value is exchanged between the parties, the contract may be deemed as invalid, hence its breach would have no legal implications (Meiners, Ringleb & Edwards, 2008, p. 232).

For a contract to be deemed as valid, people who enter into the contract must be legally capable of entering into binding contracts. Parties who cannot enter into legally binding contracts include minors, insane people, or people who are intoxicated (Meiners, Ringleb & Edwards, 2008, p. 232). In addition, the subject matter of the contract must be lawful for the contract to be valid (Meiners, Ringleb & Edwards, 2008, p. 233).

In a court of law, the offender may use all the above grounds to prove reasons for breach of the contract. This may be used to show that the breach was not illegal. This includes whether the breach was due to substantial performance or inferior performance.

Rights of the non-breaching parties

The innocent party in a breach of contract has several rights that entitle him to the recovery of the damages, which may have occurred due to the other party’s underperformance, or breach of the contract. The rights of the individual are mainly conferred on the contractual rights between the parties. Therefore, should any of the parties breach the contract, the innocent party may seek legal redress to recover any damages due to the breach of the contract (Cohen & McKendrik, 2005, p. 9). Moreover, the innocent party has a right to get the benefits, which the other party may have accrued due to the breach of contract.

Options available to plaintiff for breach of contract

Breach of a contract may result in damages to the plaintiff, which may be either financial or nonfinancial. The plaintiff may seek financial compensation from the offending party, the main purpose of which is to ensure that the plaintiff reverses to a position which he would have been had the offending party met the contractual agreements.

Parties entering into a contract may also have a liquidated damage clause. This would help in determining the compensation to be paid to one party in case the other party breaches the terms of the contract. The liquidated damage would be applied if a court determines that one of the parties breached the conditions of the contract. Liquidated damage is mainly used in cases where the calculation of the damages resulting from the breach of the contract is difficult (Walston-Dunham, 2008, p. 442).

However, in most instances, the court is at the discretion to determine the remedies that may be given to the plaintiff. In some instances, the court may fail to offer the remedies if it feels that by doing so it may be subjecting the other party to unfair punishment, as the party had no intention of breaching the contract. Certain cercumstances, which may be out of his control, may have led to the breach of the contract (Walston-Dunham, 2008, p. 442).

The offended party should seek legal counsel immediately after the other party has breached the contract. Communication between the offending party and the plaintiff should be through the plaintiff’s lawyer, as this would help protecting the plaintiff’s interest incase he goes on with litigation.

Conclusion

Litigation due the breach of contract usually aims to restore the plaintiff in the position in which he would be had the other party not breached the contract. However, it is impossible to actually fully compensate the other party and cover for the damages that may have occurred due to the breach of the contract. The party that breaches the contract also suffers financial loss due to the breach of the contract, hence, in case of litigation, no party really benefits. Thus, both parties should ensure that they provide favorable condition to enable each party meet its contractual agreements. Nevertheless, litigation due to breach of contract should be used as a last resort to solve the disagreements which may arise in the course of performing the contract.

Reference

Cohen, N. & Mckendrick, E. (2005). Comparative remedies for breach of contract. Oregon: Hart Publishing. Web.

Meiners, R.E., Ringleb, A.H. & Edwards, F.L. (2008). The Legal Environment of Business. OH: Cengage Brain. Web.

Teller. (2010). Contracts and Sales: Outlines and Case Summaries (Law School Survival Guide). NY: GYAN France. Web.

Walston-Dunham, B. (2008). Introduction to Law. OH: Cengage Learning. Web.