How do I claim for breach of contract?
A breach of contract can occur when a party to the contract fails to fulfil an obligation under an agreement or breaks the terms of the agreement. There are several legal hurdles to overcome in order to be successful in a breach of contract claim. This article sets out what must be proved by a party claiming for a breach of contract.
The existence of a legally binding agreement
A contract is a promise or an agreement between two or more parties that is legally binding. There are three crucial elements that must be present for a contract to exist, which are as follows:
- There must be an offer made to one party, which is then accepted by another
- The parties must have had a clear intention to be legally bound by the terms of the agreement
- There must be consideration (i.e. where one party promises to do something, such as pay money, in return for receiving a right, interest, or benefit promised by the other party, for example, goods or services).
The promise or agreement can be made expressly (in writing or oral communication) or implied by conduct.
The agreement was breached
Once you have proved that a legally binding agreement existed, the next hurdle is to demonstrate that a party has acted in breach of its obligations under the agreement. You will need to provide evidence of what these obligations were and how they were not met (or not performed to a reasonable standard).
The loss caused by the breach of contract
The final hurdle to overcome is to show that the innocent party suffered a loss as a direct consequence of the breach of contract and should be compensated in damages for the loss caused. Generally, in assessing the level of damages to be awarded, the court will consider the following factors:
- What position the claimant would be in had there not been a breach of contract.
- Whether the claimant has taken reasonable steps to mitigate their loss.
- Whether the loss caused to the claimant was reasonably foreseeable by both parties at the time the contract was made.
As litigation can be an expensive and lengthy process, it is important to consider the merits of your claim and the loss that has been suffered before pursuing a claim for breach of contract. For more information on the costs of litigation, click here.