Article 2.1.5 Contract Performance and Breach

1. General Duty of Performance: Each party to a contract governed by this ICT Code shall perform its obligations in good faith, in accordance with the terms of the contract and the reasonable expectations arising from the agreement. However the duty of good faith shall not be interpreted to override express contractual terms or impose fiduciary obligations unless clearly intended by the parties.

2. Material and Minor Breach:

   Subject to the agreed terms between the parties in a relevant contract:

3. A material breach is one that substantially deprives the non-breaching party of the benefit of the contract and may justify termination, damages, or other remedies.
4. A minor or non-material breach does not go to the root of the contract and entitles the non-breaching party only to appropriate remedies short of termination.
5. ICT Courts shall consider the extent to which the breach affects contractual performance, the possibility of cure, and whether the aggrieved party received substantially the expected benefit.
6. When possible, the non-breaching party shall allow a reasonable opportunity to cure a minor breach unless time is of the essence or the contract expressly excludes such cure periods.
7. Timeframes and Milestones:
8. Time shall not be of the essence unless expressly stipulated or necessarily implied by the nature of the agreement.
9. Failure to meet non-essential deadlines shall not constitute a material breach unless it causes significant prejudice.
10. Where contractual obligations are linked to milestones, staged payments, or progress indicators, such linkages shall be enforced in accordance with their intended civil or commercial function.
11. Conditions Precedent and Subsequent:
12. A condition precedent is a contractual requirement that shall be fulfilled before a party is required to perform an obligation. If not fulfilled, the obligation does not arise.
13. A condition subsequent is an event or state of affairs that extinguishes an existing obligation upon its occurrence.
14. The burden of proving the satisfaction or non-occurrence of a condition rests on the party asserting it.
15. Force Majeure and Excused Performance:

Subject to the agreed terms between the parties in a relevant contract:

1. A party shall not be liable for non-performance of contractual obligations where such non-performance is caused by a force majeure event beyond its reasonable control, which renders performance impossible or commercially impracticable.
2. Force majeure events may include, but are not limited to, acts of God, war, terrorism, natural disasters, epidemics, cyberattacks, labour strikes, civil unrest, or changes in applicable law.
3. The party invoking force majeure shall promptly notify the other party and use reasonable efforts to mitigate the impact. Performance shall be suspended during the period of force majeure.
4. The notice of force majeure shall specify the nature of the event, the anticipated duration, and the impact on contractual obligations, and shall be provided within a reasonable period after the event becomes known.

5. Anticipatory Breach:

   A party may treat the contract as repudiated and seek appropriate remedies if the other party clearly indicates, by words or conduct, that it will not perform a material part of its obligations.

   (i) The aggrieved party may suspend performance and demand adequate assurance of future performance where there is reasonable doubt as to the counterparty’s willingness or ability to perform.

   (ii) The aggrieved party may elect to terminate the contract in response to an anticipatory breach, provided such election is reasonable and proportionate in the circumstances.

6. Partial and Substantial Performance:

   (i) Where a party has performed a contract in part but not fully, ICT Courts shall determine whether the partial performance satisfies the substantial purpose of the contract.

   (ii) If partial performance is accepted, the other party may be entitled to a proportionate adjustment in consideration or to damages for any shortfall.

   (iii) A contract may be considered substantially performed where the essential purpose of the contract has been fulfilled, notwithstanding minor omissions or deviations, provided such deviations do not defeat the core contractual objective.