1、Unit 5 Breach of the Contract,When a persons performance is due, any failure to perform that is not excused is a breach of contract. Not all breaches of contract are of equal seriousness, however. Some are relatively minor deviations, whereas others are so extreme that they deprive the promisee of t
2、he essence of what he bargained for. The legal consequences of a given breach depend on the extent of the breach.,Classification of Contract Breach,1. Non-performance（1）Subjective non-performance不愿履行（2）Objective non-performance履行不能2. Late performance3. Partial performance4. Defective performance5. A
3、nticipatory Breach and Actual Breach6. Material Breach and nonmaterial Breach,Effect of Material Breach,A material breach occurs when the promisors performance fails to reach the level of performance that the promisee is justified in expecting under the circumstances.The party who is injured by a ma
4、terial breach has the right to withhold his own performance. He is discharged from further obligations under the contract and may cancel it. He also has the right to sue for damages for total breach of contract.,Effect of Nonmaterial Breach,By contrast, when the breach is not serious enough to be ma
5、terial, the nonbreaching party may sue for only those damages caused by the particular breach. In addition, he does not have the right to cancel the contract, although a nonmaterial breach can give him the right to suspend his performance until the breach is remedied. Once the breach is remedied, th
6、e nonbreaching party must go ahead and render his performance, minus any damages caused by the breach.,Determining the Materiality of the Breach,The standard for determining materiality is a flexible one that takes into account the facts of each individual case. The key question is whether the breac
7、h deprives the injured party of the benefits that he reasonably expected.,Anticipatory Repudiation,One type of breach of contract occurs when the promisor indicates before the time for his performance that he is unwilling or unable to carry out the contract. This is called anticipatory repudiation o
8、r anticipatory breach. Anticipatory breach generally constitutes a material breach of contract that discharges the promisee from all further obligation under the contract.,Remedies for Breach of Contract,Contract remedies focus on the economic loss caused by breach of contract, not on the moral obli
9、gation to perform a promise. The objective of granting a remedy in a case of breach of contract is simply to compensate the injured party.Types of Contract Remedies 1) Legal remedies (money damages) 2) Equitable remedies (such as Specific Performance ) 3) Restitution It requires the defendant to pay
10、 the value of the benefits that the plaintiff has conferred on him.,Legal Remedies ( Damages ) - Limitation on recovery of Damages in contract Cases,1 a party can recover damages only for those losses that he can prove with reasonable certainty.2 A breaching party is responsible for paying only thos
11、e losses that were foreseeable to him at the time of contracting.3 Plaintiffs injured by a breach of contract have the duty to mitigate ( avoid or minimize ) damages.,Remedies under CISG,The remedies under CISG are drawn from both common law and civil system (1) avoidance of the contract; (2) seller
12、s right to remedy or cure; (3) sellers additional time to perform (4) price reduction (5) money damages (6) specific performance,Avoidance of contract,In the case of a dispute under CISG, one party can avoid the contract only in the case of a fundamental breach by the other party.,Sellers right to r
13、emedy,A seller who has delivered some goods to the buyer prior to the delivery date, even if the goods are nonconforming or the shipment is not complete, has the chance to remedy the problem in the shipment, until the time for performance expires.,Sellers additional time to perform,In the event that
14、 the seller has failed to deliver the goods, and the time for their shipment or delivery has passed, the buyer may grant the seller extra time to do so. During this time, the buyer may not avoid the contract or resort to a breach of contract action.,Money damages,The method of measuring money damage
15、s depends on whether the buyer has been able to purchase substitute goods from another supplier. If the buyer does purchase substitute goods, the buyer may claim damages if the substitute goods cost more than the contract price. If the buyer has not purchased substitute goods, damages are measured b
16、y the difference between the contract price and the current market price.,Specific performance under CISG,A court may grant specific performance only if all of the following conditions are met: (1) the buyer had not resorted to another remedy, such as avoidance or price reduction; (2) the seller had
17、 failed to deliver, or in the case of nonconforming goods, the nonconformity was so serious that it constituted a fundamental breach; (3) the buyer gave timely notice to the seller that the goods were nonconforming; (4) the buyer had made a timely request that the seller provide substitute goods.,Re
18、medies of anticipatory breach,Right to suspend performance: either party may suspend performance under a contract if one party realizes that the other party will not perform a substantial part of its obligations. The right to suspend performance ends when the other party provides adequate assurance
19、that it will perform. Right to avoidance Avoidance of installment contract,elements of contract breach (China),the two elements that constitute a contract breach： （1）existence of breach， （2）no excuses,classification of contract breach,1 breach by one party/ breach by both parties单方违约与双方违约。 2 materia
20、l breach/ non-material breach根本违约与非根本违约。 3 non-performance/ incomplete performance不履行，不完全履行。 4 anticipatory breach/ actual breach预期违约与实际违约。,common remedies for contract breach,（1）强制履行 Specific Performance （2）损害赔偿 Money Damage （3）解除合同 Discharge （4）禁令 Injunction （5）违约金 Penalty （6）采取补救措施 remedies（适用于不适
21、当履行的情况） （7）宽限期 period of grace （适用于迟延履行的情况）,remedies in China,1） 强制履行 (specific performance) 又称为实际履行，继续履行。指一方违反合同时，另一方有权要求其依据合同的规定继续履行。强制履行在我国是最重要的补救方法。对于金钱债务均可以适用强制履行，对于非金钱债务，适用强制履行有如下限制： （1）法律上或者事实上不能履行 （2）债务的标的不适于强制履行或者履行费用过高,违约的救济（补救方法）- 中国,2） 解除合同 cancellation of contract按英美法的规定，只有在违反条件或重大违约时，才
22、发生解除合同的问题。如果一方仅仅是轻微违约，对方只能请求损害赔偿，不能解除合同。在中国，违约致使合同履行成为不必要时，才成为解除合同的理由。3）宽限期（给予违约方一段合理的额外履约期限） 在买方要求卖方履行义务时，他可以规定一段合理时限的额外时间，就是Sellers Additional Time to Perform。在这种情况下，除非买方收到卖方的通知，声称他将不在所规定的时间内履行义务，买方在这段时间内不得对违反合同采取任何其他补救办法。但是，买方并不因此丧失他对迟延履行义务可能享有的要求损害赔偿的任何权利。,违约的救济（补救方法）：中国,4） 损害赔偿：损害赔偿是指合同一方当事人的违约
23、行为给对方当事人造成财产损失时，违约方向对方当事人所作的经济补偿。损害赔偿具有典型的补偿性，例外是，消费者权益保护法规定的经营者提供商品货服务有欺诈行为的，双倍赔偿的规定。损害赔偿的原则： （1）完全赔偿原则 （2）可预见原则 （3）减轻损失原则,损害赔偿的计算公式,损害赔偿范围=直接损失+间接损失-可避免的费用 可避免的损失 例：张三与李西与8月1日约定由张三于10月1日交付活鸡1000只，价格10000元，由李四负责提货。李四为此安排车辆运输，运费500元。李四又与王五签订合同，将该批活鸡转卖，价格15000元。 问（1）如果张三未能与10月1日将该批活鸡交付给李四，应当赔偿李四多少钱？
24、（2）如果张三准时交付，但交付的1000只活鸡有禽流感，导致李四自有的两千只鸭子死亡。每只鸭子8元。问张三应赔偿李四多少钱。 （3）如果李四在发现活鸡得了禽流感以后可以及时将其隔离，并予以处理。但张三拒绝及时处理该批活鸡，导致其两千只鸭子受感染。问张三应赔偿李四多少钱。,违约的救济（补救方法）- 中国,5） 定金 (deposit)6） 违约金 （Liquidated Damage）这是违约补救的最常用办法之一。但各国规定有所不同。大陆法认为违约金具有两重性，即惩罚性和赔偿性，英美法认为，对于违约只能赔偿，而不能予以惩罚。 7）采取补救措施 修理：更换：重作： 8）减少价款或者报酬：,违约的免
25、责事由 Excuses,Although nonperformance of a duty that has become due will ordinarily constitute a breach of contract, there are some situations in which nonperformance is excused because of factors that arise after the formation of the contract. When this occurs, the person whose performance is made im
26、possible or impracticable by these factors is discharged from further obligation under the contract. The following discussion concerns the most common grounds for excuse of nonperformance.,法定的免责事由不可抗力 Force Majeure Clauses,根据我国法律的规定，所谓不可抗力，是指不能预见，不能避免并不能克服的客观情况。不可抗力的要件为： （1）不能预见，即当事人无法知道事件是否发生，何时何地发
27、生，发生的情况如何。对此，应以一般人的预见能力为标准加以判断；（2）不能避免，即无论当事人采取什么措施，或即使尽了最大努力，也不能防止或避免事件的发生；（3）不能克服，即以当事人自身的能力和条件无法战胜这种客观力量；（4）客观情况，即外在于当事人的行为的客观现象。,Excuses for breach in Civil Law情势变更原则 fundamental change in circumstances,情势变更原则是指合同成立后，作为合同关系基础的情势，由于不可归责于当事人的原因，发生了非当初所能预料的变化，如果仍坚持原来的法律效力将会产生显示公平的结果，有悖于诚实信用原则，因此，应当
28、对合同的法律效力作相应的变更乃至合同解除的一项法律原则。,Excuses for Breach in Common Law,Frustration of Contract A contract is frustrated where, after the contract was concluded, events occur which different from that which was in the contemplation of the parties at the time they entered into the contract. A contract which ha
29、s become impossible of performance is frustrated. Where the common purpose for which the contract was entered into can no longer be carried out because of some supervening event the contract may be frustrated. Supervening illegality can operate to frustrate a contract.,CISG exemptions for impediment
30、s beyond control,A party is not liable for a failure to perform any obligations if : it was due to an impediment beyond control; the impediment was not reasonably foreseeable at the time the contract was concluded; the impediment was unavoidable and could not be overcome, notice was given to the other party of the impediment and of its effect on the contract.,
