Breach of Contract Research Plan
Understanding the nuances of contract law and relevant precedent is crucial when pursuing a breach of contract civil action. This research plan is a simple introduction that junior lawyers and law students might find helpful as a guide through the essential steps in researching legal precedent in New Zealand, empowering you to build a strong case.
This article is not intended to replace or substitute legal advice from a qualified lawyer. If you require legal assistance, get in touch with us at 021 083 68491 or email info@consultyj.com to speak about your options.
Step 1: Elements of a Breach of Contract Claim in New Zealand
To establish a breach of contract claim in New Zealand, you must prove several key elements:
- Existence of a valid contract: This requires a legally binding agreement between two or more parties, formed through a clear offer, acceptance, and consideration, with a mutual intention to create legal relations. This is supported by the fundamental principles of contract law and reflected in legislation such as the Contract and Commercial Law Act 2017.
- Breach of a contractual term: This involves one party's failure to perform a contractual obligation as agreed. The breach can manifest as non-performance, late performance, or defective performance.
- Material breach: It's important to note that not all breaches give the aggrieved party the right to cancel the contract. The breach must be "material," meaning it either involves an essential term expressly or impliedly agreed upon in the contract, or it substantially alters the benefit or burden under the contract for the aggrieved party.
- Damages: The non-breaching party must have suffered financial or other quantifiable losses due to the breach.
Step 2: Case Law Defining Breach of Contract Elements
While the Contract and Commercial Law Act 2017 provides a statutory framework for understanding breach of contract, case law helps interpret and apply these principles to specific situations. For example, the case of Cooke v Gill (1873) 2 offers insight into when a cause of action accrues for breach of contract.
To further explore case law defining these elements, consider using legal databases like Westlaw NZ or LexisNexis NZ. Utilize keywords such as "breach of contract," "contract formation," and "contractual terms" to find relevant cases. Legal encyclopedias and textbooks can also provide a general overview of the elements and guide you towards important case law.
Step 3: Case Law on Remedies for Breach of Contract
When a breach of contract occurs, the non-breaching party may seek various remedies. The legal resources highlight the following options:
Remedy | Description | Discretionary? | Citation |
Monetary damages | Financial compensation to cover losses suffered due to the breach. | No | 3 |
Liquidated damages | A predetermined amount agreed upon in the contract for specific breaches. | No | 3 |
Unliquidated damages | Where the loss is not predetermined, and the court assesses the appropriate compensation. | No | 3 |
Specific performance | An order requiring the breaching party to fulfill their contractual obligations. | Yes | 4 |
Urgent injunctive relief | Time-critical court orders to prevent irreparable harm, such as freezing assets or preventing the sale of certain goods. | Yes | 3 |
License fee damages | Damages assessed by reference to a hypothetical negotiation between the parties to fix a price for licensing the breach. | Yes | 5 |
Monetary damages are the most common remedy, aiming to restore the non-breaching party to the position they would have been in had the contract been performed. Liquidated damages provide certainty by setting a predetermined amount for specific breaches, while unliquidated damages require the court to assess the appropriate compensation when the loss is not specified in the contract. For instance, a contract may stipulate a daily penalty for late completion of a construction project (liquidated damages), while a breach causing loss of business opportunity might require the court to determine the appropriate compensation (unliquidated damages).
Specific performance compels the breaching party to fulfill their obligations, but it's a discretionary remedy typically awarded when damages are inadequate4. Urgent injunctive relief provides immediate court intervention to prevent irreversible harm in time-sensitive situations.
It's important to recognise that the traditional approach to breach of contract in New Zealand emphasises damages as the primary remedy, with specific performance being a discretionary option.
To delve deeper into case law on remedies, use legal databases with keywords like "contractual remedies," "damages," "specific performance," and "injunctions." Focus on cases that discuss the principles and circumstances surrounding these remedies.
Step 4: Factually Similar Case Law
Identifying relevant case law with similar facts is crucial for understanding how courts have applied legal principles in comparable situations. To achieve this, analyze the key facts and legal issues in your case and use them as keywords in legal databases. For example, if your case involves a breach of a commercial lease, use keywords like "commercial lease," "breach," "repudiation," and "remedies."
The provided sources offer an example of a tenant breaking a one-year commercial lease after three months This highlights the concept of mitigating loss, where the aggrieved party is expected to take reasonable steps to minimize their losses. In this scenario, the landlord would be expected to try and find a new tenant to reduce the financial impact of the breach.
Step 5: Relevant Statutes and Regulations
Statutes and regulations form the backbone of legal research. In New Zealand, the Contract and Commercial Law Act 2017 is a cornerstone for breach of contract cases.^3 This Act comprehensively addresses various aspects of contract law, including:
- Contractual privity (allowing third parties to enforce certain contracts)
- Contractual mistakes
- Remedies for breach of contract
- Frustrated contracts (where unforeseen events make performance impossible)
- Illegal contracts
Other relevant statutes may include the Employment Relations Act 2000 for employment contracts and the Fair Trading Act 1986 for misleading or deceptive conduct related to a contract.
To find relevant statutes, use the legislation.govt.nz website and search with keywords related to your case.
Step 6: Law Review Articles and Treatises
Law review articles and treatises provide in-depth analysis and commentary on breach of contract law, offering valuable insights and perspectives. Consider exploring the following resources:
- Journals:
- Otago Law Review
- Victoria University of Wellington Law Review
- Treatises:
- Corbin on Contracts
- Williston on Contracts
- Farnsworth on Contracts
These resources are often accessible through legal databases or university libraries.
Limitations and Defenses
It's crucial to be aware of potential limitations and defenses that might arise in breach of contract claims. One notable concept is that a party in breach of contract cannot sue the non-breaching party to recover potential losses they might have incurred had the contract been performed. This principle prevents the breaching party from benefiting from their own wrongdoing.
Conclusion
This research plan provides a structured approach to researching precedent for your breach of contract civil action in New Zealand. By diligently following these steps, utilising legal databases and resources, and focusing on the specifics of your case, you can effectively gather the necessary information to support your legal arguments. Remember that thorough legal research is the foundation for a successful outcome in any breach of contract case.
References
1. What Is a Breach of Contract and What Does It Mean for Me? - LegalVision New Zealand, accessed on February 15, 2025, https://legalvision.co.nz/commercial-contracts/breach-contract/
2. Time and the blamelessly ignorant plaintiff: a review of the reasonable discoverability doctrine and section 4 of the limitation act 1950 - AustLII, accessed on February 15, 2025, https://www.austlii.edu.au/nz/journals/OtaLawRw/1998/6.pdf
3. What are the Remedies for Contract Breach in New Zealand?, accessed on February 15, 2025, https://legalvision.co.nz/commercial-contracts/remedies-for-contract-breach/
4. Cuncannon, Fionnghuala --- "The Case for Specific Performance as the Primary Remedy for Breach of Contract in New Zealand" [2004] VUWLawRw 26; (2004) 35(3) Victoria University of Wellington Law Review 657 - NZLII, accessed on February 15, 2025, http://www.nzlii.org/nz/journals/VUWLawRw/2004/26.html
5. Remedies: Breach of Mandate & Licence Fee Damages (On Demand), accessed on February 15, 2025, https://thelawassociation.nz/cpd-library/remedies-breach-of-mandate-licence-fee-damages-on-demand/
6. THE CASE FOR SPECIFIC PERFORMANCE AS THE PRIMARY REMEDY FOR BREACH OF CONTRACT - Open Journal System, accessed on February 15, 2025, https://ojs.victoria.ac.nz/vuwlr/article/download/5708/5038/8005
7. Contract and Commercial Law Act 2017 - New Zealand Legislation, accessed on February 15, 2025, https://www.legislation.govt.nz/act/public/2017/0005/21.0/whole.html
8. Employment Relations Act 2000 No 24 (as at 26 November 2024), Public Act 134 Penalties for breach of employment agreement - New Zealand Legislation, accessed on February 15, 2025, https://www.legislation.govt.nz/act/public/2000/0024/latest/DLM60381.html
9. Introduction - Contract Law Treatises - Guides at Georgetown Law Library, accessed on February 15, 2025, https://guides.ll.georgetown.edu/treatise-finders/contracts
10. Legal Treatises by Subject: Contracts - Harvard Library research guides, accessed on February 15, 2025, https://guides.library.harvard.edu/c.php?g=309841&p=2076808
11. Treatise Finder: Contracts - Guides at University of Michigan Law Library, accessed on February 15, 2025, https://libguides.law.umich.edu/treatise-finder/contracts
12. New york university - NYU Law Review, accessed on February 15, 2025,
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