Breach of Contract

breech ov KON-trakt Old English 'bryce' meaning 'breaking' combined with Latin 'contractus' meaning 'a drawing together'

Definition

The failure by a party to a contract to perform their obligations under the agreement, without lawful excuse, entitling the other party to remedies.

Detailed Explanation

A breach of contract occurs when a party fails to fulfill their contractual obligations, either wholly or partially, without legal justification. The Indian Contract Act, 1872, though not explicitly defining breach, provides for its consequences under Sections 39, 53, 55, and 73-75.

Breaches are classified as: (1) Actual breach - occurring at the time performance is due; (2) Anticipatory breach - renunciation before due date under Section 39; (3) Material breach - going to the root of the contract; (4) Minor breach - not substantially affecting the contract; and (5) Fundamental breach - depriving the other party of substantially the whole benefit.

The innocent party may elect to: treat the contract as subsisting and claim damages; or treat it as discharged and refuse further performance. The doctrine of substantial performance permits recovery where performance, though incomplete, substantially confers the intended benefit. Time is of the essence when expressly stated or implied by the nature of the contract.

Essential Elements

1 A valid and enforceable contract must exist
2 The party must have an obligation to perform under the contract
3 The party must have failed to perform the obligation
4 The failure must be without lawful excuse
5 The other party must have suffered loss or be entitled to relief
6 The breach must not be caused by the innocent party's own conduct

Leading Cases

Hukum Chand v. Girdharilal

1963

AIR 1963 SC 668

Relevance: Explained the consequences of breach when time is of the essence

Satyabrata Ghose v. Mugneeram Bangur & Co.

1954

AIR 1954 SC 44

Relevance: Distinguished frustration of contract from breach; impossibility as a defense

Frost v. Knight

1872

(1872) LR 7 Ex 111

Relevance: Classic authority on anticipatory breach applied in Indian courts

V. Shyam Kumar v. M/s. Fruit Express

2020

(2020) 12 SCC 181

Relevance: Discussed remedies available upon breach including damages and specific performance

Usage Example

"The supplier committed a breach of contract by delivering goods that did not conform to the specifications agreed upon in the purchase order."

Synonyms

contract violation default non-performance

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