Dudley Solicitors

What is breach of contract ?

“Breach of contract” is a legal term which means that one or more terms of an agreement have been broken. When terms of the agreement are breached this could lead to a successful claim in damages and the contract being declared void.

Common Breaches of Contract

When a contract is formed then both parties have promised to the other to carry out certain obligations. If one of the parties fails to keep to their side of what they agreed to do then that party can be said to have breached the contract.

A breach can also take place if work purported to have been carried out is defective, or if one party does not carry out the work in a specified time. If a party does not pay for a service, or the goods ordered are not delivered or services are not carried out on time without a proper explanation then these are also examples of a breach of contract.

Types of Breach of Contract

There are four principal types of breach of contract. They are minor, material, fundamental and anticipatory breaches.

A minor breaches would involve a caterer using Tesco oranges in a fruit salad when the contract specified Sainsbury’s oranges. This would be considered a breach even though the oranges are similar.

A material breach can be defined as a breach that has serious implications to one party if the breach occurs.

A fundamental breach of a contract is a breach so serious that the agreement can be terminated.

An anticipatory breach is where party to the contract tells the other that he has no intention of complying with the terms of the agreement in the future even though the breach has yet to occur.

Damages for Breach of Contract

If a court determines that a contract has been breached then the usual redress is the issue of damages. The damages will be used to compensate the innocent party to the contract for his losses arising from the breach. Note that if the actual loss suffered was small then damages may still be awarded even but these damages will normally be nominal sums.

Proof of Breach

In order to decide whether a breach has taken place a court will determine this. Contracts do not need to be in writing and in the case of verbal contract there may be no written evidence meaning the judge will need to consider the terms of the purported agreement and what took place in practice.

If a judge determines there was a breach then damages may be awarded. In awarding damages the judge will look at the loss incurred due to the breach and any award given may include future loss that could be reasonably foreseen from the contract.

Such losses can include the cost of rectifying the breach, loss of profits and wasted expenditure if disputes do end up in the courts.

Click here for the Dudley commercial disputes and breach of contract page.