Ar įvertindamas sutarties nutraukimą dėl esminio pažeidimo teismas turi atsižvelgti į sutartį pažeidusios šalies nuostolių dydį?
Does the court have to consider the amount of damages when dealing with termination of the contract in the case of the material breach?

Summary/Abstract: DOES THE COURT HAVE TO CONSIDER THE AMOUNT OF DAMAGES OF THE BREACHING PARTY WHEN DEALING WITH TERMINATION OF THE CONTRACT IN THE CASE OF THE MATERIAL BREACH? To guarantee justice, it is the duty of the court to guarantee not only verbal explanation of the contracts but explanation according to actual intentions on the parties; moreover it is important to consider the essence and aim of the contract as well as the circumstances of its making and the parties’ behavior after contracting. Contract explanation is a complicated process in the legal system. The problem appears when we talk about the damages of the breaching party as about one of the possible criteria while terminating a contract. When dealing with the case about the terminating of the contract, evaluating the circumstances and interpreting the contract, the court evaluates the damages of the innocent party in order to determine the breach also. Under certain circumstances the court considers the damages (the amount of it, to be more precise) of the party that breached the contract either. Both in Lithuanian and in the common law countries, the damages of the beaching party is among the criteria that the court has to consider when making a decision to terminate the contract. The court practice when evaluating the amount of damages of the party in breach in the context of the contract terminating, however, differs a lot depending on the fact whether the contract beach is adjudged to be material or non-material. In the case Dakin (H) Lee and Co v. Lee (1916), where the breaching party had built the entire house not in accordance with the instructions, the court decided that the breaching party had not breached the contract materially, and the contract should not be terminated. In this case, the court evaluated profit of the innocent party, the intentions of the breaching party and its possible damages, however, the damages of the breaching party were not evaluated as a separate criterion. Most important thing here was that the breach of the contract was adjudged to be non-material. In the case Re Moore Co. v. Landares the seller had supplied the agreed amount yet packed in different quantity from the agreed one. The court declared this to be improper pursuance of the obligations and the buyer had the right to reject the whole line, because the quantity in one pack was an essential condition in their contract. The court explained this as the breach of material covenant. Under the circumstances of this case, the court made decision without considering the fact that the damages of the breaching party were big. Consequently, in the cases, where the reason to terminate the contract is material, the court does not consider the damages of the breaching party. Generally it is presumed that the party innocent due to the breach of the contract will have damages. If the damages are great, the court interprets this as a material breach of the contract. (...)

• Details
• Contents