Construction Contract Law 2 Essay Example | Topics and Well Written Essays - 2000 words

Construction Contract Law 2 - Essay Example However, Comfort Kitchens Limited are currently in default of payments, have failed to comply with the conditions of the contract regarding water isolation and have undertaken repairs in breach of the express terms of the contract. As such, there is no contention that Comfort Kitchens is in breach of contract on a strict interpretation of the express contractual terms (Cracknell, 2003). However, the central issue of contention will be X’s rights against Comfort Kitchens for the breach. In business contracts the law distinguishes between breach of conditions and warranties (Treitel, 2007). Only a breach of condition will permit an innocent party to terminate the contract as a fundamental breach (Chitty 2007). Moreover, a fundamental breach will grant the right to sue for damages for the breach (Treitel, 2007). Material breach of contract in contract law is further referred to as repudiatory breach (Treitel, 2007). In the leading case of Suisse Atlantique Societe d’Armement Maritime SA v NV Rotterdamsche Kolen Centralem ([1966] 1 Lloyds Rep 166), Lord Reid defined fundamental breach as â€Å"a well known type of breach which entitles the innocent party to treat it as repudiatory and to rescind the contract†. Moreover, as a matter of law, in the case of Photo Productions Limited v Securicor Transport Limited ([1980] AC 827) it was held that the relevant factor in determining whether a term was a condition or not was the intention of the parties. This wa s further affirmed in the decision of Edward v Skyways ([1964] 1 WLR 349). Nevertheless, it is necessary to protect against abuse of the presumption especially in unequal bargaining power scenarios and case law acknowledges that the presumption in commercial contracts can be rebutted. For example, in the case of JH Milner v Percy Bilton [1966] 1 WLR 1582] it was determined that the presumption of intention