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A breach of contract occurs if a party fails to perform a contractual obligation within the time frame specified or commits an anticipatory breach of contract.

A consequence of breach of contract is that the other party may be entitled to claim damages. The right to recover damages arises as at the time of the breach. In cases of anticipatory breach the right to claim damages does not depend on the other party being entitled to terminate the contract as a result of the breach.

In addition to the right to claim damages there are three other possibilities for the non-breaching party:

  1. The breach may trigger an express right under the terms of the contract;
  2. The breach may disentitle the party in breach of the contract from requiring the other party to perform their obligations under the contract;
  3. The breach may entitle the innocent party to terminate the contract.

Once a breach of contract has been established the question arises whether the breach of the term entitles the innocent party to terminate the performance of the contract. To answer this question the term must be classified as a condition, a warranty or an intermediate term.

  • Generally a condition is a contractual term which, if breached will entitle the other party to terminate the contract;
  • A warranty is a contractual term which, if breached, does not entitle the other party to terminate the contract;
  • An intermediate term is a wide contractual term, which, if the breach is sufficiently serious, will entitle the other party to terminate the contract.

Whether a term is a condition, warranty or intermediate term depends on the construction of the contract.

If you are a party to a contract and there has been a breach, we recommend that you contact our office and arrange an appointment to see one of our International Disputes & Litigation Solicitors in our Sydney office. By appointment, we can also arrange a time for you to see one of our lawyers at a branch office. For a complete listing please see our "Locations" tab.

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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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