A Contract Under Run refers to a situation where the actual costs incurred in performing a contract are lower than the estimated costs agreed upon in the contract. This can occur due to various reasons such as efficient project management, cost-saving measures, or unforeseen circumstances. In such cases, the party performing the contract may seek to recover the difference between the estimated and actual costs from the other party. However, the recovery of the under run amount may be subject to the terms and conditions specified in the contract, including any provisions related to cost variations or change orders. It is important for both parties to carefully review the contract terms and consult legal counsel to determine their rights and obligations in case of a Contract Under Run.
A contract under run refers to a situation where the actual performance or quantity of goods or services provided under a contract falls short of what was originally agreed upon.
Yes, a contract under run can be considered a breach of contract if the party responsible for providing the goods or services fails to meet the agreed-upon quantity or performance standards.
The non-breaching party may be entitled to various remedies, such as seeking specific performance, damages, or termination of the contract.
In certain cases, a contract under run may be excused if it can be proven that the shortfall was due to unforeseen circumstances beyond the control of the party responsible for performance. This may be referred to as a force majeure event.
Including specific provisions in a contract to address the possibility of a contract under run is advisable. These provisions may outline the consequences, remedies, and any limitations or conditions related to a potential under run.
If a contract under run is caused by the actions or omissions of the other party, the responsible party may still be held liable for the shortfall. However, the non-breaching party may need to provide evidence to establish the causal link.
Yes, parties involved in a contract under run dispute can attempt to resolve the issue through negotiation or mediation. This can help avoid costly litigation and potentially preserve the business relationship.
Possible legal defences to a contract under run accusation may include impossibility of performance, frustration of purpose, or mutual mistake. However, the availability and success of these defences depend on the specific circumstances of the case.
In some cases, a contract under run may give the non-breaching party the right to terminate the entire contract. However, this will depend on the terms of the contract, the severity of the under run, and any applicable laws or regulations.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 5th April 2024.
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