An overview to contract dispute resolution

A contract dispute, otherwise known as a breach of contract, is when a party, without valid justification, fails to carry out their obligation as stated in their contract or agreement. A contract dispute can only exist if there is a valid and legally enforceable contract in the first place. 

Examples of breaches of contract

  • Late performance – not performing duties in a timely manner
  • Non-performance – refusing to perform what they have promised to do
  • Defective performance – failing to fulfil an obligation
  • Going against the contract – doing something that they have promised not to do

However, in order for a performance failure to be considered a breach of contract, there are two elements that must be considered before. It takes into consideration whether the party has failed to perform an obligation and whether there is no valid reason for the party’s failure to perform the obligation. Thus, not every case of performance failure would automatically be considered a breach of contract. 

Contract dispute remedies and resolutions

Four Remedies for Breach of Contract

  • Termination of contract

A breach of contract may allow the innocent party to terminate the contract. If the innocent party does so, both parties will be discharged from any of their contractual obligations. However, depending on the contract, it may not be liable to termination. This often depends on how the term is stated in the initial contract. 

  • Monetary compensation

 This is also known as damages. By default, the innocent party is entitled to damages for any losses suffered due to the breach of contract. The innocent party must prove to the court that they had still taken reasonable steps in order to mitigate their losses though. 

  • Specific performance

 This is when the court orders the defaulting party to perform what is stipulated in their contract. This is something that is typically granted when monetary compensation is deemed inadequate as a remedy to the breach of contract. An example of when an order of specific performance is granted often includes contracts that involve the sale and purchase of limited edition goods, land or a house. 

  • Prohibitory injunction

 This is when the court compels the defaulting party to fulfil their promise of not doing something stipulated in the original contract. Similar to an order or specific performance, this is only granted when monetary compensation is not adequate. 

Four Ways To Resolve Contract Disputes

  • Court proceedings or arbitration

These are formal methods of resolving a contract dispute. However, since there is a high level of formality involved in these methods, they often tend to be more expensive and lengthy. Arbitration can be done in private, however, both parties will have to agree to this, and it will often have to be stipulated in the contract. Court proceedings in Singapore are often public. 

  • Private mediation

Private mediation focuses on reaching a settlement that is amicable (win-win) for both parties. This often involves an impartial third party (a mediator), who is often a qualified lawyer, who can help with the decision-making process and help parties come to an agreement. This is often the lowest-cost option. However, if an agreement cannot be reached, it can lead to legal action.

  • Employees who fall under the Employment Act

The Ministry of Manpower is an option for employees who are governed under the Employment Act to deal with disputes that are regarding employment matters. 

  • Small claim tribunals

Small claim tribunals handle claims that go up to $20,000. It is a relatively quicker, cheaper and much less formal method of dispute resolution. The parties are not required to be represented by lawyers and if the parties have consented, claims can be made for up to $30,000. 

Are you in need of a breach of contract lawyer?

Regardless of whatever method you are planning to use in order to resolve a breach of contract, you will need to consult an experienced breach of contract lawyer beforehand. Christopher Bridges Law Corporation is a commercial and criminal litigation law firm with a practice in Singapore, with a specialisation in dispute resolution, litigation and arbitration, on top of criminal law, business and commercial law, fintech, and family law. 

If you are in need of legal assistance or debt collection in Singapore, do not hesitate to contact their legal experts for a free consultation session.