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What does it mean to breach a contract?

On Behalf of | Apr 15, 2024 | Firm News

The idea of a “breach of contract” is a fundamental concept that fuels both civil litigation and the evolution of contractual law. Essentially, a breach of contract represents a failure by one or more parties to fulfill the terms agreed upon in a contract. 

A contract is a legal agreement between two or more parties that binds them to certain obligations involving the performance of specific duties. These duties can range from delivering goods, performing services, making payments or abstaining from certain actions. A breach occurs when any party to a contract does not honor their part of the agreement, either partially or in full. 

Types of breaches

A breach of contract failure can result from not performing on time, not performing in accordance with the terms of the contract or not performing at all.

A minor breach, also known as a partial breach, occurs when a party’s actions or inactions do not completely compromise the purpose of the contract. A minor breach allows the non-breaching party to still receive the goods or services specified, though perhaps not exactly as originally intended. The non-breaching party may seek damages for any losses incurred, and remains obligated to fulfill their part of the contract.

By contrast, a material breach is a more significant failure, wherein the breach substantially undermines the contract’s purpose, rendering the agreement “irreparably broken.” In such cases, the non-breaching party is no longer required to perform their contractual obligations and can seek legal remedies, including compensation for any financial losses.

An aggrieved party may seek damages, specific performance or even the cancellation of the agreement to which they are bound. In any consequential scenario, seeking legal guidance when a breach of contract occurs – or is imminent – is generally wise, given all that is at stake.