A contract has been arisen in between both parties about Antonio offering a television and satellite connection on a specific weekend to Ben. As this event did not occur as per the contract, the contractual obligation has been breached and Antonio has bre

This particular non-compliance of Antonio has caused a valid reason for Ben to terminate the contract. It is now clearly established that Antonio has breached the contract and Ben whereby becomes entitled to claim for damages. ‘A contract is breached when a party, without lawful excuse, fails to perform any of his contractual obligations’. A standard of ‘strict liability’  is compulsory in contractual obligations where the promisor guarantees a ‘particular state of affairs’. If performance has fallen short of this then there has been a breach of contract. As the breach of contract is total by failure of performance the innocent party (Ben) has the right to terminate this contract.

 ‘A condition, an essential term, the breach of which (a ‘repudiatory breach’) gives the claimant the right to terminate and claim damages for losses up to termination and beyond (i.e. for loss of the bargain).’ It is important to classify the term at the time of formation as it will determine whether the breach of this term gives the right to terminate irrespective of the seriousness of the actual consequences of the breach.  So a claimant can only terminate the contract where the term breached is a fundamental one (a ‘repudiatory breach’). In DECRO-WALL INTERNATIONAL SA-v- PRACTIONERS IN MARKETING Ltd (1971) Buckley LJ said:  

‘To constitute repudiation, the threatened breach must be such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract... breach must be of an essential term, or of a fundamental term of the contract, or that it must go to the root of the contract...[the question is whether] the consequences of the breach [is] such that it would be unfair to the injured party to hold him to the contract and leave him to his remedy in damages as and when a breach or breaches may occur? If this is so, then a repudiation has taken place.’

As it is seen the fundamental and essential term of the contract between Ben and Antonio was to provide entertainment to the customers at a specific time as this was not done and all points stated in the above quote have been fulfilled and it can be taken that Ben has the right to terminate this contract. When termination is justified, the effect is that both parties will be discharged from performing any more of their primary obligations under the contract. But, secondary obligations may still exist (e.g. the obligation to pay damages).

It is generally assumed that the parties involved in the contract, contract to improve their position and where the extent of that improvement is impossible to quantify, it is reasonable to assume that the claimant would have recovered his costs (and so be no worse off) if the contract had been performed. An example of this is shown in the case of ANGLIA TELEVISION Ltd-v- REED : Reed contracted to star in Anglia’s film but repudiated the contract at the last moment: Anglia abandoned the project when they failed to find a replacement actor. It was impossible to assess what profits Anglia would have made if the contract had been performed. But, Anglia was awarded its expenses although these were incurred before the contract was made, since it was foreseeable that they would be wasted in the event of breach.

The case above directly relates to this question in terms of damages as Ben is able to claim reliance damages for loss suffered. Now the question arises as to the quantum of damage. Damages is the action brought for compensation for loss caused by the breach. Ben has already spent £3000 for food and drinks on the hope that the program will attract more people so that he can make a good profit but due to the failure of the television the expected business did not take place as a larger portion of the crowd was disappointed and left the pub. Most of the drinks and food remained unsold. Ben not only lost a substantial profit relied on the performance of the television but also lost the good will of the business. Since the good will was damaged the following weekend program was also not successful and Ben again lost £1800 as the whole good will of the pub has been tarnished by the previous unpleasant scenario. In this situation Ben becomes entitled to claim not only the £550 he has paid but also for the damages caused due to the non-compliance of Antonio.

We now need to analyse the nature of the remedies whereby Ben could be duly compensated. Remedies are always created to protect the interest of the innocent party against the breach of contracts. Since Ben spent more money on the expectation to enhance his business on the basis of the television function he becomes entitled to apply the expectation and reliance remedy which is the action for money paid under a total failure of consideration and will a account for his profits as Antonio is fully responsible for the damages. Antonio has to take responsibility of the damages of £1800 on the following weekend because those damages caused to Ben because of the bad reputation caused to the pub due to the breach of Antonio.

As to the conclusion it is agreed as there has been a valid contract entered into between Antonio as being the party of the first part and Ben as being the party of the second part. This contract has a valid offer, acceptance, consideration and the intention to create a legal obligation. Ben suffers substantial loss due to the non-compliance of Antonio and whereby becomes entitled to make a claim against Antonio for all the damages he sustained.  The most common and widely available remedy for  breach of contract is damages measured by claimants loss of expectation, the aim is to put the claimant in a position so far as a money can do, that he would have been in, had the contract been duly performed. Ben should recover the benefit he conferred on the defendant on performance of the contract where one his expectation and reliance losses to the benefit conferred is substantially his whole loss. From this it can be said that Ben can claim full damages to the loss he has made from the failure of performance by Antonio and Antonio will not be entitled to claim anything.