Question 4

How can breaches and alleged breaches of international contracts be resolved.

A contract is basically an agreement between two parties creating a legal obligation

for both of them to perform specific acts. A contract may be used for various
transactions and the agreement typically involves the exchange of goods, services,
money or promises of any of those.

A contract engages each party to perform the specified duties agreed. In other words,
a contract is a legally agreement that recognizes and governs the rights and duties of
the parties of the agreement.

A contract may be either oral, written even the fact that a solid contract is preferred to
be in writing.

A contract is legally enforceable because it meets the requirements and approval of

the law, hence for the contract to be enforceable, each party must exchange something
of value called “consideration”.

As far the aspect of establishing contract is concerned, breach of contract is an

important element. The law of any country provides the parties of an agreement
access to legal remedies such as damages, cancellation but also access to resolve
through mediation, arbitration or going to Court in cases of disputes going to breach
of contract.

Contract originates from the contract law which within the civil law tradition, is a
branch of the law of obligations. Contract law is in brief the body of law that governs,
enforces and interprets agreements, thus explaining the legal binding responsibility
part of the parties in a contract and the fact that a contract is the center of many
business dealings.

For a contract to be valid, regardless of its type, it must fill in the following elements:

1. an offer must be made

2. an acceptance – which is an agreement of the other party to the offer presented
3. consideration – something of value which all parties to any contract must
provide the other parties to enter into the agreement. The “something of value”
does not necessarily need to be money.
 4. Competency – all parties entering the contract must have a legal capacity or
competency to do so and each must understand its liability and responsibilities
under the contract
5. Mutuality – all parties must be willing and have an intent to perform their
obligations under the contract at the time it is made. Any cancellation of
contract to be agreed by all parties involved.

It is important to note that there are laws which govern contracts at the federal, state
and local levels, though most contracts are subject to the laws of the state in which it
was created. The fact that the laws governing contracts vary by jurisdiction, most
contracts include the law provision under which it is governed. This is a section of the
contract itself in which it is specifically stated which state’s laws will apply to
interpreting and enforcing the contract should a dispute arise. Many contracts also
specify how a dispute is to be dealt with, often stating that the parties will use
arbitration, mediation rather than go to court over a dispute.

There is breach of a contract in two ways, notably, actual breach when one party to
the agreement fails or refuses to honor his part of, or complete his duties under, the
contract and an anticipatory breach where there is an intended or anticipated failure of
one party to perform his duties under the contract. Anticipatory breach occurs when
one party informs the other party of his unwillingness, or inability, to perform under
the contract ahead of time. In addition, a breach to a contract can be either minor
where a party does not perform a part of the contract but does not violate the whole
contract or material breach which is a total breach given the breach is so substantial
that it impairs the contract as a whole.
Conflicts within a contract and agreement are to be managed. Therefore once a breach
of contract occurs, the parties can first use mediation to solve the issues. Mediation is
an amicable dispute resolution process. It provides a space of confidentiality and trust
which allows entities and people to negotiate and explore by themselves a mutually
acceptable solution to their dispute. The mediator uses a wide variety of techniques to
guide the process in a constructive direction by managing interaction between parties
and by facilitating open discussion. If consensus is not reached through mediation
which is considered in law as an alternative dispute resolution in law, the parties go
through arbitration.
Arbitration is a jurisdictional method of resolving conflicts outside the courts. The
dispute will be decided by one or more persons (the "arbitrators", "arbiters" or
"arbitral tribunal"), which renders the "arbitration award". The arbitrators, selected on
the basis of their competence and availability ensure rapid access to justice by means
of a flexible process. An arbitration award is legally binding on both sides and
 enforceable in the courts. Arbitration consists of a neutral and impartial third party or
parties, who will hear and decide on the dispute by applying rules of law or trade
usages and customs. Arbitration is often used for the resolution of commercial
disputes, particularly in the context of international commercial transactions.
The legal framework for arbitration in Mauritius is governed by the following texts:
 International Arbitration Act 2008
 International Arbitration (Miscellaneous Provisions) Act 2013
 Supreme Court (International Arbitration Claims) Rules 2013
 The Convention on the Recognition and Enforcement of Foreign Arbitral
Awards Act 2001 (as amended in 2013)
 Code de Procedure Civile
When no agreement is found under arbitration, the parties may seek to enforce their
contract rights in a court of law. This is called Litigation or lawsuit which is a civil
action brought to Court with the plaintiff party requesting a legal or equitable remedy.

The types of legal remedies available for breach of contracts depends on the everity of
the breach. Generally, damages awarded are categorized into four groups:

 Compensatory Damages: Compensatory damages are those that compensate

the non-breaching party for their losses. This is the most common legal remedy,
and a court can order the breaching party to pay the non-breaching party
enough money to get what they were promised by the terms of the contract;
 Restitution: If the non-breaching party is able to prove that their loss is due
directly to the actions of the breaching party, a judge may order restitution,
which could include lost wages, medical bills, and property repair and/or
replacement;
 Punitive Damages: Punitive damages are generally awarded alongside
compensatory damages. The purpose of punitive damages is to punish the
breaching party when they have engaged in particularly egregious behavior in
order to breach the contract, such as being intentionally negligent; or
 Specific Performance: Specific performance is utilized as a legal remedy for
breach of contract, and it requires the breaching party to perform their part of
the contract. Specific performance is not always available.

In the light of this, it is clear that disputes are corrected in the three mentioned ways
but the most important is that the contract itself must be clear regarding the method to
adopt in case of breach of contract and the legal instance at which to bring the case in
an event of arbitration or mediation.