DISCHARGE OF CONTRACT - Coggle Diagram
DISCHARGE OF CONTRACT
3. DISCHARGE BY BREACH
- Breach of contract occurs when a party to a contract expressly or impliedly faiils or refuses to perform or fails to perform satisfactorily one or more of his contractual obligations.
- Where there is breach of contract the innocent party may:
Elect to treat the contract as discharged by the breach, or
He may treat the contract as subsisting.
- If the innoecent party elects to terminate the contract:
he is relieved, of all further performance under the contract
the innocent party will also be entitled to damages for the breach.
- if the innocent party elects to treat the contract as subsisting:
he is entitled to damages but must perform, ready and willing to perform all his obligations under the contract as and when they become due after all the breach.
- However, not every breach gives the innocent party the right to terminate the contract.
- Some breaches only give rise to limited right , the right to damages without the right to discharge the contract.
- This depends on the nature of the terms breached.
- if the breach goes to the root of the contract:
It constitutes a breach of condition
Such breaches entitles the innocent party to treat the contract as discharged and to sue for damages.
- However, if the breach is of a less important term:
it is a breach of warranty
the innocent party is not entitled to treat the contract as discharged.