Facts About Breach Of Contract
What is a 'contract'?
A contract can arise in many ways. It can be oral, it can be written, it can be implied by conduct. Basically a contract, unlike a negligence claim, is an actual agreement made between the parties, the breach of which implies a remedy, usually in damages.
What is a 'breach of contract'?
A breach of contract is simply a situation where the parties had an agreement to do or not to do something that may have been written, oral or implied, and that one of the other parties failed to abide by that agreement. The breach of which implies a remedy, usually contract damages. Usually these types of damages are called actual or expectancy damages. Those damages would be what you expected under the contract.
What is a 'breach of confidence' under contract law?
A breach of confidence is basically where two parties have a contract not to reveal private privileged confidential information, and then another party breaches that confidence by revealing that information. An example of a breached confidence could be someone who worked for the Coca-Cola corporation and then took Coke's secret recipe over to Pepsi, and tried to sell it to them. That would be a typical example of what you've seen in the news recently of a breached confidence.
What is 'fraud' under contract law?
Fraud doesn't normally involve a written agreement, although it can. Basically what fraud is, is a tort. It's an intentional tort wherein someone makes a promise or a statement to someone when they never intended to fulfill the promise or that they knew the statement was false at the time that they made it. Fraud is distinguishable from a breach of contract wherein when one person enters into a contract and the other person enters into the contract, they form an agreement which they both intend to keep. However, under a false promise theory, which is a subset of fraud, one may argue that when the other person entered into the contract he never intended to fulfill the contract. And because of that he is guilty of fraud. Or it could include a situation where someone has made a representation to you that was false and because that representation was false and you were damaged as a result of that false representation you can now sue that person for damages. One additional benefit of a fraud case to the plaintiff is that normally a fraud case arises to a clear and convincing evidence standard, which, if met, would often entitle the plaintiff to sue for punitive damages, not just for his compensatory damages.
What is 'duress' under contract law?
Duress when used in the contract understanding, is simply a situation where someone enters into a contract basically with a gun to their head. The law says no, that's no contract. If you are forced to enter into a contract under duress, the law will undo that contract and declare it illegal.
What is 'impossibility of performance' under contract law?
Impossibility of performance under a contract theory simply means that it is absolutely impossible for the person to perform the contract due to forces that were extraneous and beyond the persons control; forces that were not in existence at the time that contract was made.
What is 'commercial frustration of purpose' under contract law?
Commercial frustration of purpose in a contract situation simply means an uncontrolled event that was unforseen about the time of the entering into the contract that frustrates the purpose of the contract from being fulfilled. For example, lets say you have a situation where you've ordered 5000 widgets, but now the state of California had declared widgets illegal. You're no longer allowed to sell those widgets, so therefore the purpose of the contract has been frustrated by a superceding or intervening law. Because of that the law will say, "No, this contract does not have to be performed because its original purpose has been frustrated".
