The trouble with entering into a contract (e.g. to buy property) is that it is human nature that no sooner do you get in than you, or maybe your spouse, want to get out. But the law will not let you do so easily as commerce requires certainty. So you are stuck, and it is at that stage you ask your lawyer to look carefully at the contract to see if it is watertight.
The terms of a contract can be divided into two types:
1. Non-essential terms otherwise called warranties. The court will order damages to compensate you rather than allow you to walk away. Therefore small breaches by the other party are not much help in getting out of a contract.
2. Essential terms otherwise called conditions or material terms. For instance, a conditional contract where you need to be satisfied as to finance or due diligence within 14 days. However, essential terms (even where the contract is marked “time of the essence”) are divided into yes you got it - two types:
a. Where substantial performance is sometimes acceptable e.g. The seller does not have a copy of a stamped lease at completion.
b. Where they must be strict compliance e.g. for handing over the money on time. Having established over the centuries a hard line on time being of the essence and that is that, the courts have been beset by reasons where they should relax their decision e.g. accident, surprise or mistake. Or a harsh or unfair outcome, such as the receipt by the vendor of an unmerited windfall or unconscionability (meaning foul play not just criminal). Lawyers have worked hard to create exceptional circumstances where the court has reluctantly given some flexibility. For instance, a short delay if your lawyer misses the bus and is late for the completion. Lawyers get less leeway in commercial matters where they are expected to have their own car.
Therefore, you cannot throw a fit and terminate a contract for some minor breach unless being fussy is reasonable in the circumstances.
(c) Paul Brennan 2015.
All rights reserved.
If you have a legal issue discuss it with a lawyer.