What can a business do if the other side breaks a contract in Trinidad and Tobago?

Ending the contract, or keeping it alive

Most breaches give a right to damages but not a right to end the contract. Unless the contract gives a wider right to terminate, it can be ended for breach only where the breach is repudiatory: breach of a term that is a condition (an essential term), a breach that goes to the root of the contract, or a clear refusal to perform. Where the contract makes time "of the essence", even slight lateness can be enough. The Privy Council, whose decisions bind the courts here, upheld the ending of a sale, with loss of the buyer's deposit, where the buyer tendered the price 10 minutes late (Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 (PC)).

A repudiation does not end the contract by itself. The innocent party ends it by accepting the repudiation, through words or conduct that clearly and unequivocally show the party in breach that it is treating the contract as at an end (Vitol SA v Norelf Ltd [1996] AC 800 (HL)). Until then, the contract continues. Terminating without the right to do so may itself be a repudiation.

What damages cover

These rules come from English cases, which are persuasive here and regularly applied.

• The expectation measure. The innocent party is, "so far as money can do it", put "in the same situation ... as if the contract had been performed" (Robinson v Harman (1848) 1 Exch 850).
• Remoteness. Only loss arising naturally from the breach, or that both parties could reasonably have contemplated when contracting as its probable result, is recoverable (Hadley v Baxendale (1854) 9 Exch 341).
• Mitigation. The innocent party must take all reasonable steps to reduce its loss, and cannot recover loss caused by failing to do so (British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 (HL)).

The High Court may add interest, at a rate it thinks fit, on all or part of the debt or damages for all or part of the period from the date the cause of action arose to judgment. This does not apply to a debt on which interest is already payable as of right, for example under the contract. A High Court judgment debt then carries interest at 5% a year until it is paid (Supreme Court of Judicature Act (Chapter 4:01), ss 25, 25A; Legal Notice 168/2016). The Petty Civil Court has similar powers (Petty Civil Courts Act (Chapter 4:21), ss 28A, 40A; Legal Notice 169/2016).

Penalty and liquidated damages clauses

A clause fixing the sum payable on breach is enforceable unless it is a penalty. The UK Supreme Court, whose decisions are persuasive here, has held that the test is whether the clause is a secondary obligation which "imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation" (Cavendish Square Holding BV v Makdessi [2015] UKSC 67 [32]). The rule applies only to what is payable on breach, not to the price or other main obligations (at [13]–[14]).

Specific performance and injunctions

The court may order the party in breach to perform (specific performance) or not to do what the contract forbids (an injunction). Both are discretionary. Specific performance is normally ordered only where damages would not be adequate.

Where and when to sue

1. Send a letter of claim. Before a High Court claim, the parties are expected to follow the Practice Direction on Pre-Action Protocols, which generally means a letter of claim and a response. The court can take a failure to comply into account when making orders, including orders about costs.
2. Choose the court. Contract claims of not more than TT$50,000 are heard in the Petty Civil Court and must normally start there (Petty Civil Courts Act, ss 8(1), 24A). It cannot grant an injunction or other equitable relief (s 15(2)(a)). Larger claims, and claims for those orders, go to the High Court. The Civil Division Act 2026 will replace the Petty Civil Court with Small Claims Courts, but is not yet in force as at 24 September 2026.
3. Sue in time. A claim founded on contract must be brought within 4 years from the date the cause of action accrued, usually the date of the breach (Limitation of Certain Actions Act (Chapter 7:09), s 3(1)(a)). The 4-year limit in s 3 does not apply to a contract made by deed, or to a claim for specific performance or an injunction, so take advice on time limits for those claims (s 3(1)(a), (3)(a)). A signed, written acknowledgment of a debt, or a part payment evidenced in writing, starts time running again, but cannot revive a claim already barred (ss 12, 13). Time is postponed where the claim is based on the other side's fraud or they deliberately concealed a relevant fact (s 14).