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What is a Breach of Contract?

A breach of contract is a legal cause of action where a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract. A breach can occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all.

Types of Breach of Contract

Breaches of contract can take several forms, each of which has its own implications for the parties involved:

  • Minor Breaches: Minor breaches include omissions or minor inconsistencies in the contract or task. These breaches are usually more easily worked out among parties and do not warrant the termination of the contract.
  • Material Breaches: A material breach is when a major term in the contract is violated. This breach entitles the non-breaching party to terminate the contract and pursue damages.
  • Anticipatory Breaches: This occurs when one party anticipates that the other party will breach the contract and decides to end it prior to the completion of the contract.
  • Fundamental Breaches: A fundamental breach is a severe violation of the contract and allows the non-breaching party to avoid further fulfillment of the contract and pursue damages.

Consequences of Breach of Contract

The consequences of a breach of contract may vary depending on the type of breach, and can include:

  • Legal action and/or compensation for damages.
  • The non-breaching party may cancel the contract.
  • The breaching party may be liable to pay interest and costs.
  • The court may order specific performance to complete the contract.

Alternative to Breach of Contract

You don’t have to breach a contract if you are unhappy with it. You can simply negotiate with the other party to reach an agreement or you can opt for mediation or arbitration.


A breach of contract can lead to the non-breaching party losing out on their expected performance or services and pursuing legal action in order to seek compensation or damages. It is always advisable to consult a lawyer if a breach of contract is suspected.

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