Lecture on Breach of Contract

Importance of Contract Terms

• Establishing contract terms is crucial to understanding obligations and determining breaches.

Types of Breaches

1. Partial Breach

   • Substantial performance; minor deficiencies.
   • Non-breaching party must continue performance.
   • Damages can be claimed, but typically minor.

2. Material Breach

   • Failure to substantially perform.
   • Significant deviation from expected performance.
   • Non-breaching party may suspend performance.
   • Can lead to damages and potential contract termination if not cured.

3. Total Breach

   • Material breach that is not cured.
   • Non-breaching party can terminate the contract.
   • Allows for suing for damages and ceases contractual obligations.

Factors Determining Materiality

• Amount of benefit received by non-breaching party.
• Adequacy of damages.
• Potential forfeiture by breaching party.
• Likelihood of cure.
• Breaching party's faith or intention.

Concept of Cure and Suspension

• Breaching party may cure a material breach to convert it to a partial breach.
• If not cured, ripens into a total breach.

Uniform Commercial Code (UCC) and Breach

• UCC applies to sale of goods.

• Perfect Tender Rule:

  • Each breach is treated as material.
  • Buyer can reject all goods if any are non-conforming.
  • Seller has a right to cure within contract performance time.

• Seller's Breach:

  • Non-delivery or non-conforming delivery.
  • Buyer's options include rejection, acceptance with cure, or partial acceptance.

• Buyer's Breach:

  • Wrongful rejection or non-payment.
  • Seller can sue for breach and seek damages.

Discharge of Contract Duty

• Full performance or rejection of tender.
• Mutual rescission or modification of contract.
• Excuses and defenses.
• Total breach or repudiation.

Anticipatory Repudiation

• Occurs when a party indicates prior to performance that they will not or cannot perform.
• Will be discussed further in the next lesson.

Conclusion

• Understanding the nature of breaches, and the rights and remedies available, is crucial in contract law.
• UCC aims to provide mechanisms for resolution without court intervention.
• Next lesson will cover anticipatory repudiation.