P7- Describe the remedies available for a breach of contract
M3- Analyse the remedies available to the business provider in the event of a breach of contract for the supply of goods and services
P7 and M3
Subject: Remedies available for a breach of contract
What is a Remedy?
If a party involved in a contract were to breach a term, or any terms within a contract it means that the other party has experienced a loss. Due to the loss that they have suffered, the blameless party will gain compensation to attempt to lessen the losses for the innocent party.
This is known as a remedy in contract law, it is in place so that those who fall victim to a breach of terms within a contract will not suffer as much of a loss provided they act fast to rectify the situation. Remedies can be written in the contract or they can be decided via a court of law.
Why is remedies important to Jack Spratt?
Remedies are important to Jack because if he were to fall victim to his supplier breaching their contract, Jack must be aware of the actions that he must take to fix the issue. Jack’s contract is with a company that will provide him with a new kitchen, in the contract that they have it is likely to state what actions and failures should be apparent to establish a breach of contract.
Liquidated damages would be, when Jack would receive a sum of money due to the other party breaching their contract. Jack must be able to establish a clear breach of contract to gain liquidated damages for his losses.
Advantages of Liquidated Damages
There are many advantages of liquidated damages, those would be; liquidated damages help a business to predict their performance based upon the costs they face due to a breach of contract. An example of this would be, if Jack were to deicide that he wanted to terminate his contract with his supplier before the final date, he may become accountable for any damages or losses that the business may experience, such as; delivery costs, manufacturing costs and storage costs.
Liquidated damages will provide both Jack and the supplier of the kitchen with a degree of protection, within their contract. This protection will help to prevent against any losses or damages that they may face throughout the contract.
Furthermore, another advantage of liquidated damages would be both Jack and the supplier could settle any dispute regarding losses or damages without having to bring it to a court of law. For example, if Jack were to cancel the contract he may offer to pay for the kitchen even though he doesn’t want it, so that the business can regain as much of their losses as possible.
Disadvantages of Liquidated Damages
A disadvantage of liquidated damages would be, that they can significantly affect both Jack and the supplier. This is because, both the supplier and Jack must follow all terms that have been outlined in there contract to prevent either of them from breaching their contract. If either Jack or...