Breach of Contract and Lawsuits - Case Study Example

Running Head: BREACH OF CONTRACT AND LAWSUITS NAME: COURCE: INSTRUCTOR: DATE: Breach of Contract In a perfect business world, disputes can be prevented from arising between two persons or companies if they entered into contract (an agreement) so that both sides would be pleased or benefit with the outcome. But in the real world (business), mistakes, delays, fraud, negligence, financial problems, misrepresentation, and many other unpredicted events can slow or even prevent a successful contract between two parties in question. Therefore, any business agreement between the two parties leads creation of some obligations to be fulfilled, hence The Law of Contracts. The law of contracts is unique from other branches of law because it does not fully explain a lot of duties and precise rights that the law will protect and enforce. Usually, the parties to a contract make the law for themselves to uphold rights and duties created as long as they do not break the rules in regard to the subject in question of their contract and the law will take effect immediately to their contract. Breach of Contract Once parties entered any businesses contract, all the party members are expected to fulfill their obligations and any failure to do so, in the eyes of the law, leads to what is called "breach" of the contract. Usually, breach happens when the other party fails to perform in accordance with what they had agreed upon in their contract. This may be due to erroneous mistakes or negligence as in the case of Georgia. When disputes erupt between the parties due to a breach of contract, there are always legal solutions or “remedies” for the breach. And for the purpose of deciding the best legal solution between the parties, a breach of contract can be divided in two categories, either “material” or “immaterial”. The case of Malcolm and Georgia illustrate how a breach of contract might happen in the real business world. In my opinion, Georgia might have breach the contract because of her negligence. According to Find Law, negligence is described as “the failure of a responsible party to work with the degree of care that a person of reasonable prudence would use under the same or similar circumstances” (Find Law, Walston-Dunham, 2002 and Hylton, & Miceli, 2002). In this case study, Georgia failed to use simple and reasonable skills in caring for Mr. Malcolm's pets. A simple mistake that Georgia might have made was by not reading the labels of the pets’ food package. Georgia, a professional as claimed in her statement, ‘I am a professional, an animal lover and that this should not be a problem’ should have known simple procedures in caring of animals (pets) by her fingertips. Thus, due to her failure to read the food package labels, it resulted in rabbit illness, structural damages and the dead of expensive tropical fish. Georgia should be liable for negligence. Negligence is not a criminal, but a civil, matter (Walston-Dunham, 2002). It is for Malcolm to prove that Georgia owed him a "duty of care" for his pets, and that that the duty assign to Georgia was breached, and that he have sustained some kind of foreseeable harm to his pets or economic loss as a result of her negligence. If successful, under the law, Mr. Malcolm will be entitled to some relief ("remedy") that will be assessed based on the harm caused or loss sustained. Law Enforcement If in case of any alleged breach, the parties are suppose to ensure the terms put down during contract implementation, should be enforced accordingly. Or try to compensate for any monetary harm due to alleged breach. Parties usually treat informal resolution as the first step in resolving any dispute arising over a contract. And if this informal attempts of resolving contract disputes fails, then the most common method in all jurisdictions that can be use to resolve contract disputes and to enforce it through lawsuits and the court system. Depending on jurisdictions, the parties in question may resolve their issues by using what is called "small claims" court. Courts or rather formal lawsuits are not the only way out for the parties involve in contract disputes. Whoever is in dispute may decide to have a mediator to review their contract dispute or can agree to obligate an agreement of that contract dispute in question. There are so many ways to compensate or to remedy a breach of contract and non-breaching party in most cases is entitled to some compensation (remedy) under regulations. Remedies As far as this case study is concerned, if an individual breaches a contract (Georgia), the other party (Malcolm) to the contract is entitled to relief ("remedy") under regulations. There are several main remedies for breaches of contract and these include and not limited to: damages, not completing specific performance and cancellation of assigned duties. Damages are the most common remedy that is most often used if in case there is a breach of contract between the involved parties. Remedy of damages is simply the payment in any form, made to the non-breaching party by the breaching party (Hylton, & Miceli 2002, Sweeney, O"Reilly, and Coleman, 2010). Depending on the type of breach that may have occurred, damages may vary with the specification of that breach in question. As far as this case study is concern, the type of damage(s) can fall in all or one of the categories; i. Compensatory (to cover direct losses and costs). ii. Consequential (to cover indirect and foreseeable losses). iii. Punitive (to punish and deter wrongdoing). The main aim of Compensatory damages is usually to put the non-breaching party to the original financial position that s/he had been if the breach had not been caused by the breaching party. Consequential damages. These are foreseeable or special damages that result from a party’s breach of contract and are usually caused by special situation beyond the contract itself. Punitive damages are payments that are aimed to punish a guilty party and also act as an example or a warning to party members from breaching any contract law in future. The breaching party in this case must pay above the original financial position of the non-breaching party (Hylton, & Miceli, 2002).  Lawsuits Evidence is what is considered to be a very important feature in any dispute in the court of law. It is always wise for one to have or gather enough evidence before he/she files a case against any defendant. From this case study, Mr. Malcolm should be able to provide evidence that there was a kind of contract between him and Georgia. Malcolm should prove or provide a letter showing that he gave Georgia instructions on how to do the work in question (Dodge, 1999, Schwartz & Scott, 2003). Malcolm has a right to sue Georgia for consequential damages or punitive damages for breach of contract concerning the care of his pets. Georgia, as we have seen above, is liable for the dead of Malcolm’s fish and the loss of the Rabbit’s hair. In the court of law, Georgia will be judge for negligence if not recklessness. Since Mr. Malcolm had told Georgia that, he is soon to show his award winning rabbit at a show in Melbourne, this is one prove that his profession is Show business and Georgia’s wrong doing will force Mr. Malcolm to file for consequential damages. If he succeeds in the court, he will recover remedies for the loss of income caused by Georgia’s negligence and recklessness. These consequential damages are usually given to victims of breach of contract based on the consequential harm to the plaintiff's career. Even though no one is certain if Mr. Malcolm was going to win the Rabbit Show, evidence of past earnings may be use to settle on the loss of future earnings of Mr. Malcolm. It may be worth for Georgia to ask the jury or the judge that her wrong doing was not deliberate and her case should be considered to fall under “Involuntary Breach” grounds. This is presumably; Mr. Malcolm did not label the containers holding the food for his pets. Therefore, this can be one reason for Georgia to convince the jury or the judge that such a breach should not be subjected to punitive damages. Depend on what state or country Georgia resides, she might get some relief, because involuntary breaches in some jurisdictions are not subjected to punitive damages. As we have seen above, all business relationships involve a lot of contracts and at one point there are breaches of these contracts. These contracts can include and not limited to: Contracts of employment, contracts for professional services, leases, and buying. And any failure to carry out a contract by a party member may lead to an action for breach of contract. Therefore, it is very important for all the parties, before entering or signing any contract to judge the terms of it in detail. The court of law states that “there is no defense to an action for breach of contract to say that you did not read the terms of the contract”. References Dodge, W. S. (1999). The Case for Punitive Damages in Contracts. Duke Law Journal, (February), 48(4), 629-699. Find Law. Retrieved on 3rd September, 2012 from http://public.findlaw.com/LCsearch.html?entry=negligence Hylton, K. & Miceli T. (2002). Should Tort Damages Be Multiplied? Journal of Law Economics and Organization, 21(2), 388-416. Schwartz, A. & Scott, R. E. (2003). Contract Theory and the Limits of Contract Law. The Yale Law Journal, 113(3), 541-619. Sweeney, B., O"Reilly, J. and Coleman, A. (2010). Law in Commerce. 4th Ed. Chatswood, NSW: LexisNexis Butterworths. Walston-Dunham, B. (2002). Introduction to Law. Clifton Park, NY: CENGAGE Learning. Read More