Contract disputes

Not necessarily, and not in every way. The right to terminate depends on the nature of the breach, the contractual termination provisions and whether the innocent party has done anything which might amount to affirmation or waiver.

Terminating wrongly can itself create a repudiatory breach. Before taking that step, I would want to understand the contractual basis for termination, the notice requirements and the commercial consequences of getting it wrong.

The fact that the other side is clearly in breach does not automatically make every form of termination safe.

An oral agreement or conduct may sometimes vary a contract. Whether the change is binding depends on the agreed terms, any required formalities, the authority of the people involved and the ordinary requirements for a valid variation.

Where the contract requires variations to be written or signed, that requirement is generally effective. In Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, the Supreme Court upheld a clause requiring written, signed variations. Estoppel may assist in limited circumstances, but an informal agreement alone is not enough.

I would review the variation clause, what was agreed, who agreed it and the evidence of any reliance before advising on its effect.

The general aim of damages in contract is to put the innocent party in the position it would have been in had the contract been performed. That is not the same as recovering every loss which followed from the breach.

Relevant considerations include causation, remoteness, mitigation, any agreed damages or limitation clauses and whether the loss is recoverable in principle.

I would usually want to work through the recoverable loss carefully before any claim is formulated, because overstating a claim can be as damaging as understating it.

Usually, a commercial contract can be binding without a signed document. However, certain transactions are subject to statutory formalities, and the contract itself may require particular changes to be written or signed.

Land transactions and some consumer credit agreements have specific formal requirements. A guarantee generally needs written evidence signed by the guarantor or a lawfully authorised agent under section 4 of the Statute of Frauds 1677. A guarantee and an indemnity are different obligations; their wording, substance and applicable formalities need separate consideration.

Where an agreement can be made informally, the absence of a signed document does not by itself prevent enforcement. The evidence of agreement and its terms remains important.

Preserve more rather than less. That includes the contract and any amendments, emails, messages, invoices, payment records, meeting notes, internal documents and records of what work was actually performed.

Do not delete material because it appears unhelpful. The difficult documents need to be understood as well as the helpful ones.

For more detail on preserving evidence in a commercial dispute, see the article on what evidence to preserve when a commercial dispute starts.