Breach Of Contract
What Is A Breach Of Contract?
The term “Breach of Contract” refers to a civil wrong where agreed-upon terms and conditions of a binding contract are violated by one or more of the parties to the agreement.
In a perfect world, when two or more parties enter into a binding contract, they all fulfill the agreed-upon contract terms. But in the real world, issues may arise, and a party to an agreement may refuse to honor the terms. When that happens, it is a Breach of Contract.
Usually, when individuals or businesses enter into a contract, there are obligations that all the parties involved agree to perform. A party’s failure to fulfill any of its duties is known as a “breach” of the contract. Depending on the terms, a party may breach an agreement by failing to perform their obligations on time, failing to follow perform according to the specifications, or failing to perform totally.
It can occur in both a written and an oral agreement. There are two main classifications of a contract breach:
- Minor breach: It occurs when a party to a contract fulfills their obligations but not entirely. For instance, your tailor agreed to deliver your new clothes to you on Monday, and however, they failed to show up with the clothes on Monday, and instead, they delivered on Wednesday.
- Material breach: It occurs when a party does something different from what they agreed to do. For instance, you ordered a box of cakes online, and when the package arrives, you discover it contains donuts instead of cake.
The two classifications of a contract breach can further be divided into two:
- Anticipatory Breach: This is a situation where one of the parties indicates that they will not fulfill their obligations. The breach is yet to occur.
- Actual Breach: This is when one of the parties fails to fulfill their end completely or incorrectly, and the breach has already occurred.
Breach Of Contract Example
Joe contracts a furniture company on Wednesday to purchase and deliver a piece of furniture the following Wednesday. Joe clarifies that the timing is essential, and the company agrees to do it on time. However, due to technical difficulties, the company fails to deliver on Wednesday and instead deliver on Thursday. In this instance, there is a minor breach.« Back to Glossary Index