Breach of Contract

Cite this article as: Jason Mance Gordon, "Breach of Contract," in The Business Professor, updated January 10, 2015, last accessed March 29, 2020, https://thebusinessprofessor.com/knowledge-base/breach-of-contract/.
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Breach of Contract
This video explains what it means to Breach a Contract.

What is a “breach of contract”?

Next Article: Methods of Resolving Breach of Contract

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A party who is not relieved from her duty of performance and fails to perform her obligations under a contract is said to breach the contract. Breach entails a failure to perform material duties in accordance with the agreement. This can include a complete lack of performance, partial performance of the material duties, or performance that fails to meet the demanded standard. A breach by one party relieves the other party’s duty of performance.

Discussion: Should different types of breach be treated differently? Why or why not?

Practice Question: Joseph enters into a contract with Eric to build a deck on Eric’s house. Joseph builds a deck that is weak, flimsy, and drastically varies from the design plans. Under what grounds might Joseph allege breach of contract against Eric?

Proposed Answer

  • Breach of contract occurs when one or both parties fail to perform their material obligations under the terms of the contract. A party may fail to perform all of the obligations under the contract – but, she will not be liable for breach if those obligations are not a primary basis for the contract. This is known as substantial performance, as all material obligations are complete. In this scenario, Joseph will likely be liable for breach of contract. The structure and design of the deck are critical aspects of the contract.

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