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What are the affirmative defenses

to a breach of contract for Project Managers?

 

FEATURED PAPER

By Raphaël de La Salmonière

Paris, France

 



Abstract

Uncertainty is a major component of project management, as in contract management. Therefore, since the numbers of breach of contract are so constant and high, it is relevant to try to diminish the uncertainty caused by these breaches through the prism of defenses to a breach of contract a company can use.

However, each breach can be defended with various defenses which have themselves advantages and drawbacks.

To determine and explain the leading causes of breach, and what are the best solutions included in affirmative defenses, we will use several tools such as the root cause analysis, qualitative and quantitative methods. The results brought by the models will help a Project Manager to determine which affirmative defense is the most likely to suit their different problematics according to the characteristics of each alternative.

Keywords: Breach of contract, defendants, contracts, lawyer, faults, complainant, affirmative defenses.

Introduction

Have you ever been tempted to breach a contract with one of your employees? Companies do that all time and between them. In 2018, “Brickstreet Mutual Insurance Company sued A & B Logging LLC for breaching a contract because of a non-payment”[1]. In 2015, in a whole different sector, “Maintenance Enterprises sued Orascom E&C USA”, two American companies, “for a breach of contract”[2] due to their bad practices and their refusal to supply them with materials. To be more exhaustive, statistic highlighted that since 2002, the percentage of failure of contracts oscillates between 20% and 30% per year[3].

Indeed, every arrangement between two parties must be translated into a tangible contract. Conducting a project without can lead to disastrous consequences. However, situations can be worst. Imagine, driving a project when suddenly, the other parts brutally stopped their works, and blame you for this unbearable situation. In fact, there isn’t any project that can be interrupted without damages. Strangely, the high proportion of breach of contract makes this situation quite common. Those cases of breach of contract are known as judicial litigation and are solved in court. The penalties generated by these lawsuits is counted in hundreds of millions or more. However, these practices are far from unusual in business and they cost a fortune to companies each year.

Therefore, Project Managers must integrate into their practices that a breach of contract is a plausible eventuality concerning the end of their project. An eventuality that implies many hazardous consequences and these consequences may be anticipated during the project. A project manager must set up boards of control to avoid getting trapped into an unexpected end of their project. The project, defined as a process for conducting  work that produces a new product of one sort or another. However, the other point of view would be to consider a breach of contract as a strategic move. Either way, Project Manager would benefit from learning how to properly risk manage their projects.

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To read entire paper, click here

 

How to cite this paper: Salmonière, R.d.L. (2019). What are the affirmative defenses to a breach of contract for Project Managers? PM World Journal, Vol. VIII, Issue I (January). Available online at https://pmworldjournal.net/wp-content/uploads/2019/01/pmwj78-Jan2019-Salmoniere-affirmative-defenses-to-breach-of-contract.pdf

Editor’s note: This paper was prepared for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director, at [email protected].

 



About the Author


Raphaël de La Salmonière

Paris, France

 

 

 

Raphaël Goguet de La Salmonière is a student of Project and Programme Management and Business Development in Skema Business School (Paris, France). He started his university studies with a bachelor’s degree in financial markets. He has various professional experience in wealth management, press agency, or database reliability. His experience in project management started during his bachelor studies when he created and directed a market finance association with 30 members during 2 years. Soon he will be AGIL & Prince2 certified.  He can be contacted at [email protected]

 

[1] Insurance company sues an employer for breach of contract (12/10/2018) West Virginia Record. Retrieved from https://wvrecord.com/stories/511590842-insurance-company-sues-employer-for-breach-of-contract

[2] Louisiana contractor wins $62M in a lawsuit against $3B southeast Iowa fertilizer plant’s general contractor (15/10/2018) Associated Press. Retrieved from https://eu.desmoinesregister.com/story/money/business/development/2018/10/15/louisiana-contractor-wins-lawsuit-against-orascom/1655486002/

[3] Why do contractors fail? (2015) retrieved from https://c.ymcdn.com/sites/www.surety.org/resource/resmgr/learnaboutsurety/why_do_contractors_fail.pdf