Breach of Contract
Parties are required to abide by their contracts to discharge their contractual obligations. Doing so completes the contract and frees each party from it. In some circumstances, the same is true for those parties who want to, and attempt to discharge their obligations, but are prevented from doing so by some action of the other party. This interference with the contract (lawyers call it "repudiation") may free the party who is trying to perform from their contractual responsibilities.
Where the payment of a sum of money is one party's obligation, this must be done by offering legal currency. The creditor is not required to make change nor is the creditor required to accept a cheque. If contractual obligations are not respected, the delinquent party is said to be in breach of contract. Breach of contract allows a party to bring the party in default to court and to get the court to correct the situation, as best the court can.
Exclusion of Liability Clauses
In what circumstances will a court deny a defendant contract breaker the benefit of an exclusion of liability clause, to which an innocent party has voluntarily contracted?
Courts will undertake a three-part inquiry to determine the enforceability of exclusion clauses. First, the question is whether the exclusion clause applies to the conduct in question. If the clause does apply, a secondary inquiry is whether the clause is valid, in the sense that it is not unconscionable between the parties. For the second prong of the test, circumstances such as the relative bargaining power of the parties at the time the contract was formed is considered. Third, if the exclusion clause applies and is valid, the court will inquire whether they should refuse to enforce it given an overriding public policy concern.
The test for the enforceability of exclusion clauses is re-stated below:
As a matter of interpretation, does the clause apply to the circumstances established in evidence?
If it applies, was it unconscionable at the time the contract was made?
If it applies and is valid, should to court nonetheless refuse enforcement based on an overriding issue of public policy?
Parties to a contract will be protected from contractual breaches by exclusion clauses, as long as they do not engage in criminal or fraudulent behaviour when tendering procurement contracts. Call the Rose Law Firm related to your business issue, including if you have suffered damages a result of a breach of contract.
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