How To Prove Breach of Contract Under Business Law

As the number of businesses has grown in the Australian market, the process has become more and more complicated and intricate. Although some businesses which run under many people and depend on each person’s cooperation are successful, some businesses face grave losses because of a breach of contracts. It can happen to anyone, and therefore it is vital to have all the information to prevent and take care of such situations.

Tearing up the contract

What is the law in Australia regarding contracts?

A contract is a legal agreement between two parties to exchange goods and services or get into a partnership. The contract law governs these agreements that looks after the rights and the responsibilities of the parties that have entered the said agreement.

Agreements can be of two types – oral and official. Though oral agreements can also bound, official agreements usually require paperwork and legal documents that need signatures.

Usually, a contract takes place through four stages which are – offer, acceptance, consideration and mutuality. The contract law in Australia is formed under the English common law and is not a statute or codified law. Under this law, the parties are at liberty to make any arrangements or strike any bargains they want to choose.

What is a breach of contract?

A breach of contract is a legal cause of action in which a binding agreement is not honoured by one or more involved parties to the contract. The party who breaches the contract may be entitled to either complete the bindings as adhered to in the contract or compensate the damages to the other party by the court of law.

What kind of breach of contracts can take place?

There are several areas where a breach of contract can take place under business law.

1. Material Breach of Contract
In a material breach of contract, the party that has agreed to provide you with a particular service such as delivering goods ends up not delivering it. For example, if you ordered a large quantity of notebooks from a stationary vendor, but the shop only ended up delivering one notebook, it is a material breach of contract. In such a contract, the party at fault is liable to pay for all damages and provide the remaining goods.

2. Anticipatory breach of Contract
If a party shows certain signs or shows an intention of a breach of contract, it is an anticipatory breach. In such a case, the counter-party can claim to not deliver their side of the promise, and can even press legal charges under the circumstances where the other party has shown intentions of not holding up their end of the deal. Again, in this case the faulted party is liable to pay for all damages and lost goods.

3. Actual breach of Contract
The most common case of breach of contract, in which one party does not deliver whatever it had promised to the other party. You can take legal action against them for not performing their end of the commitment and they are liable to pay for all financial loss or damage.

Things to consider proving a breach of contract in business law.

To prove that the wronged party agreed with you, you must present the following conditions to be valid:

1. Offer – that there was a discussion between both parties (and more) regarding an agreement of business or entering a contract. However, not all discussions are considered as an offer.
2. Consideration – wherein both the parties have considered the offer and have given the signing of a contract a thought. Unilateral promises, or promises based on past services are usually not punishable under the law.
3. Acceptance – Here the parties have agreed either verbally or on paper to do business together under certain terms and conditions. Since oral agreements are difficult to prove in the court, they prefer written agreements.
4. Mutual Understanding – wherein all the parties have agreed to the terms and conditions and all other clauses stated in the contract.

If you can prove the above four conditions in court, then one can easily prove the wrongdoings of the counterparty in case of a breach of contract.

If you are on either side of it and need help, our breach of contract lawyers can help you sort out the situation.

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