For a binding contract to exist in law, there must be an offer by one party, and acceptance by the other including agreement that some benefit ("consideration") has to pass between them.
If a binding agreement is not honored by one or more of the parties, then there is a breach of contract.
There are 2 remedies for breach of contract:-
- To claim compensation for loss or damage caused by breach of contract, or
- To seek an order of the court for the contract to be performed - know as specific performance
A claim for damages is the normal remedy and will be for:-
- Any loss or damage caused by the breach of contract, which arose from it in the usual course of events, or
- Any loss or damage that the parties knew would be likely to result from a breach of contract when they made the contract
- Loss or damage that is too remote and will not give rise to compensation
- A contract may stipulate a sum to be paid in case of a breach of contract
Specific Performance is only ordered in the discretion of the court:-
- When there is no measure of the damage caused by non-performance, or
- Where financial compensation would not provide adequate relief for non-performance
- Specific performance won't be ordered if a party to the contract has become incapable of performing his part of it
There is a 6-year limitation period for bringing a breach of contract claim.