Breach of Contract

A breach of contract is a violation of any of the agreed-upon terms and conditions

of a binding contract. The breach could be anything from a late payment to a
more serious violation such as the failure to deliver a promised asset.

A contract is binding and will hold weight if taken to court. To successfully claim a
breach of contract, it is imperative to be able to prove that the breach occurred.

 A breach of contract occurs when one party in a binding agreement fails to

deliver according to the terms of the agreement.
 A breach of contract can happen in both a written and an oral contract.
 The parties involved in a breach of contract may resolve the issue among
themselves, or in a court of law.
 There are different types of contract breaches, including a minor or
material breach and an actual or anticipatory breach.

Understanding a Breach of Contract

A breach of contract is when one party breaks the terms of an agreement
between two or more parties. This includes when an obligation that is stated in
the contract is not completed on time—you are late with a rent payment, or when
it is not fulfilled at all—a tenant vacates their apartment owing six-months' back
rent.

Sometimes the process for dealing with a breach of contract is written in the
original contract. For example, a contract may state that in the event of late
payment, the offender must pay a $25 fee along with the missed payment. If the
consequences for a specific violation are not included in the contract, then the
parties involved may settle the situation among themselves, which could lead to
a new contract, adjudication, or another type of resolution.

Types of Contract Breaches

One may think of a contract breach as either minor or material. A "minor breach"
happens when you don't receive an item or service by the due date. For
example, you bring a suit to your tailor to be custom fit. The tailor promises (an
oral contract) that they will deliver the adjusted garment in time for your important
presentation, but in fact, they deliver it a day later.

A "material breach" is when you receive something that is different from what
was stated in the agreement. Say, for example, that your firm contracts with a
vendor to deliver 200 copies of a bound manual for an auto industry conference.
But when the boxes arrive at the conference site, they contain gardening
brochures instead.

Further, a breach of contract generally falls under one of two categories: an

"actual breach"—when one party refuses to fully perform the terms of the
contract—or an "anticipatory breach"—when a party states in advance that they
will not be delivering on the terms of the contract.

Legal Issues Concerning a Breach of Contract

A plaintiff, the person who brings a suit to court claiming that there has been a
breach of contract, must first establish that a contract existed between the
parties. The plaintiff also must demonstrate how the defendant—the one against
whom a claim or charge is brought in a court—failed to meet the requirements of
the contract.

Is the Contract Valid?

The simplest way to prove that a contract exists is to have a written document
that is signed by both parties. It's also possible to enforce an oral contract,
though certain types of agreements still would require a written contract to carry
any legal weight. These kinds of contracts include the sale of goods for more
than $500, the sale or transfer of land, and contracts that remain in effect for
more than one year after the date on which the parties sign the agreement.

Courts will review the responsibilities of each party of the contract to determine
whether they have fulfilled their obligations. Courts also will examine the contract
to see if it contains any modifications that could have triggered the alleged
breach. Typically, the plaintiff must notify a defendant that they are in breach of
contract before advancing to legal proceedings.

Possible Reasons for the Breach

The court will assess whether or not there was a legal reason for the breach. For
example, the defendant might claim that the contract was fraudulent because the
plaintiff either misrepresented or concealed material facts.

The defendant may alternatively argue that the contract was signed under
duress, adding that the plaintiff compelled it to sign the agreement by applying
threats or using physical force. In other cases, there might have been
errors made by both the plaintiff and the defendant that contributed to the breach.