Breach of Contract

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Breach of Contract

Contract Cancellation

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Acquisitions Law/Spring I 2013

3-8-2013 |

Table of Contents

Breach of Contract 1

Overview 1

Definition of a Contract 1

Contract Formation 2

Advantages of Contracts 2

Breach of Contract 3

Nonperformance 5

Cancellation 5

Three-Day Right of Rescission 6

Oral versus Written Contracts 6

Conclusion 7

References 9

Breach of Contract

Overview

There are many ways to terminate the obligations of a contract. Most often, parties conclude their contract obligations by performing them. However, sometimes problems arise and parties cannot or will not complete their obligations under the contract. When this occurs, contracts may be terminated by reasons of rescission, breach, or impossibility of performance, (Lawyers, 2013).   The purpose of this paper is to discuss contract cancellations due to a breach of contract.

Definition of a Contract  

A contract is a legally enforceable agreement between two or more parties, which creates a duty for each party to do something (e.g., to provide goods at a certain price according to a specified schedule) or a duty not to do something (e.g., to divulge an employer's trade secrets or financial status to third parties) (Gruning, 2009).   If one party fails to act as promised, and the other party has fulfilled the duties under the contract, that party is entitled to legal relief.   For example, Company A agrees to pay Company B $10,000 for farming equipment. Company B provides the equipment as required in the contract.   Company A admits that the equipment meets the contract specifications but fails to pay within a timely manner.   Company B can sue for damages.   Generally, the non-breaching party's remedy for a breach of contract is money damages that will put the non-breaching party in the position that it would have had if the contract had been performed.   However, under special circumstances, a court will order the breaching...