Proctor : September 2019
46 PROCTOR | September 2019 Pleading breach of contract BY KYLIE DOWNES QC AND MAXWELL WALKER Breach of contract is one of the most common forms of civil claim. There are some matters which need special attention when pleading this cause of action in the state courts in Queensland. This article considers a simple claim for damages for breach of contract. Forms In the state courts, the relevant forms generally used for a breach of contract case are a Claim (Form 2) and Statement of Claim (Form 16).1 There are prompts in the forms available on the Queensland Courts website that will help practitioners follow the Uniform Civil Procedure Rules (UCPR). For example, the prescribed form for a claim contains notices regarding suing in a representative capacity and the application of cross-vesting legislation, which can be removed if inapplicable. Reusing a claim which was drafted for another client or used in a different proceeding may result in a failure to include these mandatory notices. The prescribed form should be used each time a new pleading is prepared, and the relevant notices removed if applicable in each case. For claims in the Magistrates Court and District Court, the plaintiff must show that the relevant court has jurisdiction to decide the claim. 2 Regard needs to be had to the current monetary limits of the jurisdictions of these courts. Elements of cause of action In summary, the elements of a cause of action in contract are the existence of a valid and binding contract, the breach of that contract, and an entitlement to the relief which is claimed, such as damages or specific performance. To succeed at trial, and depending on the matters raised in defence of the claim, you must show that:3 1. A contract was made between the plaintiff and the defendant. 2. The defendant has breached the contract as correctly construed. 3. Performance is not excused by an exempting provision or invalidating factor. 4 4. The contract was not terminated before the breach.5 5. The remedy being sought is available.6 6. It is not unconscionable to make the claim.7 Rule 149(1)(b) of the UCPR requires a statement of claim “to contain a statement of all the material facts on which the party relies but not the evidence by which the facts are to be proved”. Rule 150(1)(a) requires every breach of contract to be specifically pleaded. Regard should also be had to the rules relating to claiming damages, namely rules 150(1)(a) and 155 UCPR. Step one: Who are the parties? Practitioners should identify a legal entity as the plaintiff and defendant. That will usually be either a particular person, or a corporate entity (for example a company with an Australian Company Number, an incorporated association,8 or a body corporate).9 There are special rules for claims involving partnerships and business names.10 If it is alleged that a contract was formed with a corporate entity, the link between the entity and the method of formation of the contract should be pleaded. Usually this will be a simple matter of pleading an agency relationship between the person who concluded the contract and the company. For example, if the contract was negotiated on behalf of a plaintiff company, ABC Pty Ltd, by its director, Jane Smith, the statement of claim would allege that the plaintiff was at all material times a company capable of being sued, and that Jane Smith was at all material times the plaintiff’s director and its duly authorised agent in respect of the matters pleaded in the statement of claim. The same pleading of agency would be made in respect of the person negotiating the contract on behalf of a corporate defendant (for the example below, we will assume Bob Lane was the defendant’s director). Step two: Mechanism of agreement Most contracts are formed either orally, in writing, or partly orally and partly in writing. The pleading will need to set out the communication of terms between the parties, and the ultimate agreement to those terms. For example, in an oral contract, an example pleading may state: “2. On 7 January 2019, in a telephone conversation at Brisbane between Jane Smith on behalf of the plaintiff and Bob Lane on behalf of the defendant: (a) Jane Smith said words to the effect that the plaintiff would buy 100 computers for $1000 each from the defendant, and otherwise the terms set out on the defendant’s website would apply; (b) Bob Lane said words to the effect that the offer was accepted.” This paragraph has pleaded the mechanism of the agreement (partly oral and partly in writing), the consideration ($1000 per computer), and the place, date and time that the contract was entered. It is generally acceptable to plead the effect of words spoken.11 Obviously when Bob Lane, in the example above, said “Yep, that sounds like we have a deal”, that would translate to “words to the effect that the offer was accepted”. However, in respect of the critical terms of an oral agreement, care should be taken to be as precise as possible as the words spoken form the basis of the liability of the parties. Step three: Terms The plaintiff only needs to plead the terms that lead directly to its entitlement to damages. Using the example above, a pleading of relevant terms may be: “3. At the time of the conversation pleaded above: (a) the defendant’s website was www.abc.com.au; (b) the website contained terms and conditions, which included an express term that all orders would be delivered for free within Brisbane within seven days of an order being placed.