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Breach of Contract

Overview of a Breach of Contract Law

A contract is an agreement between two or more parties to do or not to do something. Three elements are needed for a contract to have been formed: 1) a meeting of the minds on the terms and conditions of the contract; 2) intention of the parties to be bound; 3) the contract was supported by consideration. A contract may be implied. A contract may be oral.

A breach is simply a failure to fully perform a duty owed under a contract when the failure was without legal excuse. A breach occurs when:

  • one party to a contract makes it impossible for the other parties to the contract to perform;
  • a party to the contract does something against the intent of the contract; or
  • a party absolutely refuses to perform the contract.

Not all breaches of contract are necessarily "contract killers" which would end up in a lawsuit. Two types of breach exist: what is called a material or total breach and what is called a simple or partial (immaterial) breach. A material breach is when the duty not performed is so important that it affects the central purpose of the contract. If a contract has been materially breached, then you are excused from performing your part of the bargain, you may end the contract, and you may seek damages.

If the breach is partial or immaterial, you may have the option to:

  • ignore or excuse the defect and continue on as if nothing occurred,
  • point out the problem to the responsible side and give it/she/him an opportunity to fix it,
  • refuse to pay anything more until it is fixed, or
  • correct the work yourself and deduct the cost from any payment.