Rewritten Breach question : Contract Law:

Question: Smooth Sam is a disc jockey. He agreed to work last Saturday for the
Nelson Arms Pub. The Nelson Arms agreed to provide Sam with all the necessary
equipment for his show including a selection of 200 records. The Nelson Arms
also agreed to pay 1000 pounds for his show on Saturday and to pay Dave, Sam’s
friend, 150 pounds to set up the equipment before Sam went on stage and to
take it down afterwards. Dave was not a party to the contract between the
Nelson Arms and Sam.

On Saturday, Dave arrived at the Nelson Arms early and set up the equipment for
Sam. However, when Sam arrived he found that there was only a selection of 40
records available. He thereupon informed Tom, the manager of the Nelson Arms
that he would not perform and left.

Tom was furious. He told Dave to leave the equipment set up and began
telephoning around to find another disc jockey for the evening. He eventually
contracted a disc jockey called Rocking Rod who agreed to perform at the Nelson
Arms that evening for 1500 pounds. tom agreed to pay for this fee but, when Rod
arrived at the Nelson Arms, Tom found that Dave had taken down the disc jockey
equipment and gone home. Tom was forced to pay two local youths 75 pounds
each to set up the equipment for Rod. Rod then performed that evening and was
very successful.

Sam and Dave are demanding their fees of 1000 pounds and 150 pounds from the
Nelson Arms. Tom has refused to pay them and it is threatening legal action by
the Nelson Arms (which is a limited company) against Sam for breach of contract.

Discuss

Answer:

The question is regarding breach of contract. A breach of contract occurs whenever a party
without any lawful excuse fails or refuses to perform, or performs half-heartedly aka
defectively, or when a party incapacitates himself from performing. Once the breach occurs it is
up to the innocent party either to terminate or affirm the contract. There were total four
contracts Nelson Arms Pub entered into. Firstly, they entered into a contract with Sam the disc
jockey for 1000 pounds and assured him that they will provide 200 records on Saturday. They
entered into a contract with Sam’s friend Dave to set up the records on Saturday before Sam
arrives. When Sam arrived to perform on Saturday he witnessed that there were only 40
records available and he got furious and informed Tom the manager of Nelson Arms Pub that
he will not be performing with the given records because the original contract was to provide
200 records. Tom got very furious and asked Dave to left 40 records on stage but Dave took it
back home.

Now, Tom started to find another disc jockey and he fined one named rocking rod. He entered
into a contract with Rod in 1500 pounds it was expensive than Sam but he had no other option
but when he find that Dave took the records with him he hired two local youths to set up the
equipment he gave 75 pounds to two local youths. There are two types of breaches repudiatory
breach and anticipatory breach. Repudiatory breach is a (breach of condition or of an
innominate term with serious enough consequences) and it is up to the innocent party to elect
to terminate the contract Photo Production Ltd v Securicor Transport Ltd. In anticipatory breach
a party communicates to the other one that he will not perform his obligations when the time
of performance comes. This is arguable which party has committed a breach. Sam can argue
that Nelson Arms Pub had done a repudiatory breach by not providing 200 records which was
written in our contract. Nelson Arms would claim that Sam had done a anticipatory breach by
leaving early and not performing his obligations. Once a anticipatory breach occurs innocent
party should wait till the last time but he should start mitigating his losses by finding an
alternative like Tom had find another disc jockey.

This is arguable that Sam did have something to perform it was difficult and hard but it was not
impossible and neither the contract was frustrated because mere hardship does not amount to
frustration Davis Contractors v Farehm. The foundation of the contract was to perform and Sam
had the opportunity to perform but he left. He can argue that what had been decided was not
provided and he is asking for 1000 pounds from Nelson Arms Pub on the basis that he came to
perform but adequate records were not present hence he left. Whenever, a breach is proven
courts then applies three tests in order to decide whether damages should be given or not. Test
of remoteness means they will whether the loss is foreseeable or naturally arising or not. Then
they would measure the damages whether to give expectation interest or reliance interest.
Expectation interest means providing what was expected from the contract and putting the
party in a post-contract position and reliance interest means putting parties in a position where
they were before the contract called pre-contract position. The last stage is to see duty to
mitigate the party who had suffered the loss either tried to mitigated his loss or not.
Sam is asking for 1000 pounds he had to prove that the loss was naturally arising from the
contract means he had to prove that had he not entered into a contract with Nelson Arms Pub
he would have performed somewhere else in the same consideration. Claimant can only
recover those losses that were within the reasonable contemplation of the parties at the time
of entry into the contract Hadley V Baxendle. “For a los to arise naturally, there must be a
serious possibility or a real danger or very substantial probability that the loss would occur
Koufos v C Czarnikov Ltd. Chances are less that Sam would get anything because he choose not
to perform on that day where it was possible to perform.

Dave is in repudiatory breach because he did not fulfill the condition of the contract and only
set 40 records and took them back when he was told to leave that setup. He is also asking for
his money chances are very high that he will not get anything. On the contrary Nelson Arms Pub
can demand something from him because had he arranged the proper setup things would have
gone easily.

Nelson Arms Pub’s manager Tom has threatened Sam and Dave that he would take legal
actions against them because they have breached the contract. It is again arguable in regard
with Sam that whether he would be held liable to pay anything because Tom is saying that both
of them had breached the contract. Tom can argue that Sam did anticipatory breach by not
performing his obligations.

In conclusion, it can be said that chances are high if Sam managed to prove the test of
remoteness that he suffered a loss and he could have performed somewhere else in the same
money or maybe more. Sam would probably demand for expectation interest. Dave would be
held liable for repudiatory breach because of him everything happened. There is a strong
probability that Tom would get something from Dave because of the breach done by Dave. This
is arguable whether Tom is liable to give something to Sam or not if he managed to prove that
Sam could have performed with given records then he might save himself from not giving
anything to Sam.