Breach of Contract: The Notice of Breach
What Is a 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.
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 he’ll deliver the adjusted garment in time for your important presentation, but in fact, he delivers 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.
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.