Breach of Contract

 

What is a breach of contract?

A breach of contract is a term which describes an occurrence which has broken an agreement. The breach may exist from the actions of one party or multiple parties and may trigger other breaches if the other party believe a need exists to protect their position.

Generally, parties come together and make a bargain which is put into words. The contracting parties formulate the agreement which will contain contractual obligations to ensure a benefit is received for a corresponding consideration.

If a party does not keep to their end of the bargain or fails to do what they promised to do, the intended function of the contract may be impugned. As a result, a breach may have occurred and a claim may be advanced for breach of contract as that’s the legal cause of action.

A breach of contract may flow from one party not carrying out a specific performance that was expected by the contract, or by interfering with the other party’s ability to perform the task.

If a party, who agreed to formulate a contract with another party, does not fulfil their contractual promise, or has given information to the other party that they will not perform their expected duty as identified in the contract, the party is said to have performed a breach of contract. In addition, if the individual is unable to perform the obligations latent in the contract for whatever reason, a breach of contract is present.

 

Types of breaches

  • Minor/innocent breach of contract constitutes a party’s inability to perform the full task expected by the contract and is generally referred to as an immaterial or partial breach of contract. In these cases, the non-breaching party may not be able to pursue for specific performance and can only seek legal action for actual damages sustained.

  • Material breaches of contract are caused by any failure to perform, which ultimately permits the other party to the contract to collect damages because of the breach or compel performance.

  • Core breaches of contract is a breach that permits the aggrieved party to terminate performance of the formulated contract. In these scenarios, the non-breaching party is entitled to sue the breaching party for damages sustained.

  • Anticipatory breach of contract, despite not a present breach is never the less anticipated and can be a repudiation or an unequivocal indication that the party intends at some future date to refuse to undertake the performance stipulated in the contract. Included in this type of breach is a situation where a future non-performance is inevitable. This type of breach of contract allows the non-breaching party the option to treat the breach as immediate, which ultimately allows them to terminate the contract and sue for damages, without waiting for the actual breach to take place.

 

Remedies

In most instances, the judicial remedy for a breach of contract is the delivery of money damages. The contract can be voided and damages awarded to put the innocent party into a position they would have been in should the breach not have occurred. Injunctive relief and damages or simply damages may be appropriate.

If an aggrieved person does not mitigate damages through reasonable means to lessen the impact of the breach they will have their damages reduced,