LAWS1204-9449-TERMINATION FOR BREACH OF CONTRACT

LAWS1204-9449-TERMINATION FOR BREACH OF CONTRACT -...

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TERMINATION FOR BREACH OF CONTRACT A party to a contract may be entitled to terminate the contract for the other party’s breach of contract. This is an important right: it discharges the non-breaching (innocent) party from further performance of the contract, whilst allowing him or her to sue for damages for loss of the benefit of the contract, including loss of future profits. Termination has a different function to rescission. Termination discharges a contract as to future performance; existing contractual rights (including rights arising from earlier breaches of contract) survive, and the terminating party’s right to damages for loss of the contractual bargain puts that party into the same position (in money terms) as if the contract had been fully performed. Contrast rescission, the purpose of which is to put the parties in the position as if the contract had never been entered, ie it unwinds or avoids the contract. Not all breaches of contract, however, give the innocent party a right to terminate; only breaches which are sufficiently serious generate the right. Consequently, an election to terminate is fraught with some danger. If the breach (or breaches) of contract relied on to justify
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LAWS1204-9449-TERMINATION FOR BREACH OF CONTRACT -...

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