Introduction

Contracts are at the heart of almost all business transactions. They can be between a range of parties, from individuals to multi-national corporations. They are designed to provide a clear, legally binding framework that outlines the obligations of all parties involved. When one party fails to uphold their contractual responsibilities, it can lead to a breach of contract. In such cases, the affected party may choose to take legal action to recover damages. This article serves as a guide to understanding and suing for breach of contract law in England and Wales.

Defining Breach of Contract

In the simplest terms, a breach of contract occurs when one party involved in a contract fails to perform any term of the contract without a legitimate excuse. This can include not completing a job, not paying on time or in full, failing to deliver goods, substituting inferior or significantly different goods, or any act which shows the party will not complete the work ("anticipatory breach").

Types of Breach of Contract

There are several types of breaches recognised by UK law:

1. Minor Breach: This occurs when a party fails to perform a small or insignificant part of their contractual duty. The impacted party can sue for actual damages but cannot terminate the contract.
2. Material Breach: This is a serious breach that affects the contract's core elements. The affected party can sue for damages and may also have grounds to terminate the contract.
3. Anticipatory Breach: This happens when one party indicates, before the due date of performance, that they won't be fulfilling their contractual obligations. The other party can sue immediately rather than waiting for the deadline.
4. Repudiatory Breach: This type of breach is so serious that it gives the innocent party the right to terminate the contract and sue for damages.

Taking Legal Action: The Process

Should you find yourself in a situation where you need to sue for a breach of contract, here's a step-by-step guide on what you need to do:

1. Gather Evidence

Gather all relevant evidence to support your claim. This includes the original contract, any amendments, correspondence relating to the breach, and proof of financial loss.

2. Notify the Other Party

Before you initiate legal proceedings, you must notify the other party about the breach and give them an opportunity to rectify it. This is typically done through a formal 'Letter Before Action'.

3. Seek Legal Advice

It's crucial to consult with a legal professional who specialises in contract law. They can provide you with expert advice tailored to your situation and guide you through the legal process.

4. Issue a claim/proceedings

If the breaching party doesn't respond or the dispute isn't resolved, the next step is to file a claim in court. In England and Wale, a small claim of up to £10,000 can be made through the county court- “small claims court” also known as Money Claim Online. Larger claims will need to go through the County Court or High Court.

5. Court Proceedings

The court give both parties a chance to present their argument and then review the matter giving a determination. If the court finds in your favour, it will issue a judgment outlining what the breaching party must do to rectify the situation and or award damages for the loss arising.

6. Enforcement

If the breaching party fails to comply with the judgment, such as failing to pay, you can return to court to enforce it. There are several methods of enforcement available, such as bailiffs, charging orders, or third-party debt orders.

Conclusion

Suing for breach of contract can be a complex process that requires a sound understanding of the law and careful preparation. It's always best to seek professional legal advice when dealing with contractual disputes. Remember, prevention is better than cure. Therefore, ensure that your contracts are well-drafted, clear, and fair to both parties whilst being commercially viable.

We can help with drafting contracts and helping with disputes.