Breach of contract

Abstract

This contribution uses J & H Ritchie Ltd v Lloyd Ltd 2007 SC (HL) 89 as a peg on which to hang a number of fundamental questions about contract: What is a contract? Does the word ‘contract’ sometimes refer to a legal relationship rather than a juridical act? If so, does this matter? Is the law on implied terms satisfactory? Might a duty of good faith and fair dealing in contract law be a better way of dealing with certain problems than resort to the implication of terms? When is a breach of contract serious enough to justify cancellation or rescission? Should a supplier of defective goods have a right to cure the defect? Is there a risk of forgetting the difference between a right to withhold performance and a right to rescind or cancel? These questions are prompted by the fact that this was a straightforward case and similar situations must occur regularly. Yet, different judges reasoned differently and came to different conclusions in the course of the case being appealed all the way to the House of Lords. The question, therefore, is: how might a simple case have been better, or in a more straightforward way, approached through law? The contribution argues that the Draft Common Frame of Reference (the DCFR) provides both concepts and rules that would have reached the ultimate conclusion in Ritchie much more quickly and perhaps the case would not have needed to be litigated at all.