Contract Breaches

A contract is a legally binding agreement between two parties. 

Every day we make contracts, when purchasing major assets such as a home or a car, when we buy items online, or when we make agreements or promises to other people. When a contract is breached, it can be frustrating and distressing to deal with the consequences, particularly where you have suffered financially because of the breach. 

Many contracts are of course verbal, and verbal (also known as oral) contracts are legally binding on the parties and enforceable if there is a dispute. What makes it more difficult where oral contracts are concerned, is proving what the parties actually agreed between them and action should be taken very quickly if you have a dispute about a verbal contract. 

The more detailed and complicated a transaction becomes, the more important it is for the contract to be in writing. This is even more crucial when the contract is between companies where detailed obligations are being imposed on all parties, with high value consequences if things go wrong.

What Is a Breach of Contract?

A contract between two parties sets out the obligations they have to each other. Typically a contract involving a business would confirm the goods or services one party has agreed to provide to the other, include deadlines by which the goods or services are to be provided and set out the price the other party has agreed to pay. 

If one of those parties fails to meet their obligations, a breach of contract occurs. There are many different ways in which a contract can be breached, which include:

• One of the parties fails to provide a service, or deliver goods on time. This particular type of breach is known as non performance; 
• The deadline for payment under the terms of the contract has been missed, and the payment remains due;
• One of the parties discovers that the other party has been dishonest, and has given incorrect information to the other party which induced them to enter into the contract under false pretenses. This is known as misrepresentation; 
• One party has made a promise to another (such as leaving them a farm or another asset, in return for a lifetime of work) which then is not fulfilled. This is known as promissory estoppel; or
• One of the parties fails to comply with a specific term in the contract which had been agreed, leading to a dispute about termination of the contract, the operation of a guarantee clause, or a penalty clause.

If you have suffered financial loss due to a breach of contract, we can help.

What is the time limit for bringing a claim for breach of contract?

The general rule in English law is that you have six years from the date that a contract was breached, to start proceedings in court. It is important to note that the 6 years starts running on the date of the breach, not the date the breach was discovered. 

If a breach of contract is discovered after the six year primary limitation period has expired, you will be out of time to bring a claim, unless one of the following applies:

• The defendant deliberately covered up their breach of contract. In these circumstances, the six year limitation period starts running when the claimant discovers the breach of contract and the concealment of it;
• If one of the parties made a mistake entering into the contract, the six years starts running when the mistake was discovered;
• In a claim for professional negligence, a further period of three years from the date of knowledge of the negligence can apply; 
• If a defendant acknowledges that they owe a debt to a claimant, the six year limitation period can start running from the date of the acknowledgement in certain cases; and
• If the claimant lacked capacity to understand that there has been a breach of contract, this can stop or postpone the limitation period from running.

If the contract was executed as a deed, the limitation period is usually twelve years from the date of breach. This would typically apply in contracts relating to the purchase or sale of property.

What are your rights if a contract is breached?

It is important to understand what your rights are if you have been the victim of a breach of contract. Every contract is different, but the typical remedies you can claim are:

• Damages to compensate you for the financial loss you have suffered as a result of the breach of contract by the other party; 
• A court order for Specific Performance, where the court orders the other party to fulfill their obligations to you under the contract; 
• You may be entitled to cancel the contract entirely and claim back everything you have paid; and
• If you bring a successful claim for breach of contract, the usual rule is that the losing party would have to pay your legal costs.

Our legal experts can help you decide which of the remedies for breach of contract is most appropriate for you. 

How much does a breach of contract claim cost?

We appreciate that dealing with contractual disputes can be expensive, but we also understand that you may have suffered losses before you come to us, and that you might struggle with legal fees.

We have innovative ways to help our client fund their claims. We will discuss with you at an early stage what funding options may be available to you and we provide bespoke funding arrangements to clients with strong cases. This can include conditional (non win no fee) arrangements if you have a very strong case, but we will tell you at the outset if we think this is appropriate for your breach of contract case. 

Get legal help for breach of contract

If you need to find a solicitor to help with contract breach, Samuels Solicitors' dispute resolution team are highly skilled in dealing with these disputes, in the County Court and in more complex hig value claims in the High Court. 

Our expert lawyers will provide you with clear advice in plain English, and help you make decisions about your case which are in your best interests. We can act quickly to ensure that your position is protected and to resolve disputes as efficiently as possible. We understand that you may wish to continue your professional relationship with the other party once the dispute is resolved, and so we will assist you to preserve commercial business relationships and contacts, if that is important to you. 

In the majority of cases, it is possible to settle disputes without starting court proceedings, and our skilled lawyers can help you navigate negotiations in breach of contract cases, to ensure the best outcome for you and your business. 

If court proceedings cannot be avoided, we have the skills and expertise necessary to provide you with the best possible representation in your breach of contract claim. Our formidable litigation experience means that we achieve the best possible outcomes for our clients on a regular basis.

If you have a problem with a contract, contact us for a free initial assessment of your case where we will outline your options and let you know what the best next steps will be.