Breach of contractA breach of contract is where a party doesn’t honour its agreement then this is a breach of contract.  Simply put if you don’t pay for your sky subscription then \your services will cease as you are not honouring your contract to pay the bills, i.e. non performance.  This can be cancelled if you paid the remaining bill and this in contractual law remuneration plus damages (cost associated with the breach) are repaid then the contract may be resumed.

You could avoid doing so by communicating to the other party the circumstances, but you could offer a discount if business to business to help resume the contract once the breach has been remunerated.  Another way to avoid, business to business, is to put an exclusion clause in the contract which allows certain breaches not to void/ terminate the contract.  This would have to be reasonable however.

Another way you can breach a contract is by interfering with the performance of another party.  For example if you granted an exclusive franchise for a price per month in a territory (lets call this company Burger Co.). Then the franchisor allowed another franchisee (another Burger Co. in your allotted post code) into that territory then the obligation of the original franchisee (your Burger Co. restaurant), (would be interfered with.  The breach of not paying the cost of franchise let’s say $2000, (due to lack of sales as another franchisee effectively takes your custom) would be voided as the franchisor (Burger Co. head office) interfered with your performance.

The’ de minimus’ rule is a defence available to breaching party.  This is whereby the party falls short of its obligation but that shortage is so small it can be ignored.  So you order 5000 footballs but 2 are deemed as faulty, then this is such a small amount that it can be argued legally that this isn’t a breach of contract by not performing an obligation.  Despite all 5000 footballs reasonably required to be functioning fully there has to be a bit of flexibility due to humankind and its imperfections.  After all, the buyer could have foreseen this imperfection and therefore offered a lower price for the products.  It has to be a reasonable amount however so it 100 were faulty then a breach would of certainly occurred and thus the offending party would have to remunerate the offset of the 100 football to the innocent party, essentially refunding them.

Whereby there is a serious breach the innocent party can repudiate a contract, thus ceasing commercial dealing with them legally.  This would lead to considerable compensation and this amount would be set by the court in the biggest incidences.  But this has costs for both side and it is now the norm to settle breaches and other disputes behind closed doors via a relative and experienced mediator of the market and/or of the mediating in general.  The decision of whom both parties would agree the amount and both save time and money of court in the process.

Exclusion Clauses can cancel (void) breaches if a party fails to do a certain act. They will entitle a party to limit or exclude liability if they breach the contract (fail to carry out a promise considered in the contract).

 However the Unfair Contract Terms Act (1977) still governs what is reasonable and undoubtedly can remove clauses that would be unfair.  Also death and injury exclusion clauses are usually unenforceable and cannot be relied upon by the party in question that printed them on its contract.

See also: Employment Law