What is Breach of Contract?
Breach of contract occurs when one or more parties to a contract are unable or unwilling to fulfill their obligations under the contract. Anticipatory breach of contract occurs when a party indicates they will not be able to, or are unwilling to, fulfill their contractual duty in the future.
Remedies for a Breach
There are different remedies for breach or anticipatory breach of contract and the appropriateness of each may depend on several factors, including the timing of the breach, the type of contract, and the relationship between the parties.
Injunction: A court will order an injunction when the best option to prevent or correct breach of contract is to put a stop to the offending action. The onus for demonstrating the need for an injunction is high, and a party trying to prevent a breach using injunctive relief must be able to establish the fact that they will suffer irreparable harm unless the court intervenes.
Specific Performance: Specific performance is the remedy of ordering a party to fulfill its obligations under the contract. This remedy is most likely to be awarded in cases where the injured party was entitled to a unique benefit under the contract for which damages alone could not compensate.
Damages: Damages are the most common relief awarded for breach of contract. Damages are awarded as a means of placing the injured party in the financial position it would have been in had the breach not occurred. Note, it is important for an injured party to mitigate, or minimize, its losses following a breach to the best of its ability, as a court is unlikely to award damages to cover preventable losses.
Contracts and the COVID-19 Pandemic
Due to the economic hardships felt in various industries across Canada and globally due to COVID-19, it is expected that breach of contract actions will soon be on the rise. In some cases, litigation has already begun in this area. In defending against a breach of contract action, many parties are expected to raise the defence of a force majeure clause, where applicable, or the common law doctrine of frustration of contract. Both occur when circumstances that were unforeseen and out of the control all parties occur which make it impossible to fulfill some or all responsibilities set out in the contract. Force majeure is limited, however, to contracts where such a clause exists, whereas frustration of contract may be argued in any contract dispute.
Contact Prudent Law in Mississauga for Adept Representation in Contract Litigation
The lawyers at Prudent Law in Toronto have considerable experience representing clients in all types of contract disputes. We provide practical advice and passionate representation in both litigation and alternative dispute resolution options. If you are involved in a contract dispute and you’d like to discuss it with one of our experienced litigation lawyers, please call us at 905-361-9789 or contact us online.