There’s a common misconception in litigation that fights get nasty and the more mud you can sling at the other side, the more likely you are to win. Of course, litigation is contentious. But you don’t win points for being unpleasant. You can resolve your conflict by making a clear, compelling case that satisfies the legal elements of a claim. Here’s what you actually need to prove to succeed in a claim for breach of contract.
1. Is there an obligation?
In a contractual dispute, the obligation will be a clause in the contract. For example, a wine bar may have a contract with a vineyard to deliver 500 bottles of unique wine to their bar on a certain date (let’s pick the 1st of the month). That would be written into the contract.
2. Has it been breached?
You then need to show that the obligation has been breached, i.e. it has not been performed as promised in the contract. Perhaps the vineyard delivered the bottles of wine on the 9th of the month instead of the 1st.
3. Did the breach cause you loss?
In this element of the claim, you have to show that it was the other side, and not anything else that caused your loss. That’s factual causation. So in the late wine delivery example, you can’t say that your profits were down that week because you didn’t have the unique wine, when in fact, your bar was closed that week anyway due to staff sickness.
You also need to prove legal causation, by showing that your loss is not too “remote”. You have to prove that that loss was in the contemplation of the parties.
Perhaps you needed the unique wine for an exclusive wine tasting evening on the 2nd of the month. You’d closed your bar to all other customers and invited a select group of 50 sommeliers to showcase your new stock, charging £100 per ticket for the event. Now if that’s the case, then your event may well be ruined by the lateness of the delivery.
You’ll only be able to recover the loss for that bespoke event if you made it clear to your supplier that the date for delivery was vital to this event going ahead.
4. Did you suffer a loss?
The breach of contract must have caused you loss. In our wine bar example, you’re unlikely to have lost too much revenue from the late delivery in the normal course of business. Presumably you’d have other wine in stock. But in circumstances in which you’d planned a special event for this particular wine that cannot be sourced elsewhere, then you may have suffered more significant losses. In this example, you lost £5,000 on the cost of the sommeliers’ event.
But you’ve also got to take some responsibility for minimising your losses. If the vineyard let you know three weeks in advance that the delivery was going to be late, then you had sufficient time to source unusual wine from elsewhere, even if it was a slight digression from what you’d originally envisaged. In legal terms, that’s mitigation.
It’s all or nothing
Those are the building blocks for your case. And you need to establish every element. If you can’t prove one of those components, then you can’t succeed in your claim. You can have a clearly written obligation in your contract, that’s clearly been breached, but if it didn’t cause you any loss then you can’t sue for damages (or at least you won’t win if you try!)
So if you’ve received a letter that accuses you of “mischaracterising the position” or tells you that what happened is “simply not fair”, take a minute to detach. Work out whether or not they have a solid legal basis for the claim. There’s no need to be rude or bullish, and it’s often a sign that the other side isn’t confident in the strength of their claim.
If you’re thinking about making a claim, and you’d like some help please do get in touch. Or, if you’re on the receiving end of a claim and you’d like some advice, we can help with that too. Just give us a call or drop us an email.