Types of breach of contracts
There are two main ways to categorize breaches of contract: by performance and by anticipation. Here’s a breakdown of the different types of breach of contract based on these categories:
By Performance
Actual Breach:
📌 This is the most common type of breach. It occurs when a party fails to fulfill their contractual obligations after the agreed-upon deadline or to the required standard. Here are some specific examples:
- ✅ Non-performance: The party simply doesn’t do what they agreed to do**, like deliver goods, complete a service, or make a payment.
- ✅ Defective performance: The party performs the task, but the quality of work or goods falls below the standard expected under the contract.
- ✅ Late performance: The delivery of goods, services, or payment is delayed beyond the agreed timeframe.
Anticipatory Breach:
📌 This breach occurs when a party clearly communicates their intention to not fulfill their contractual obligations in the future. This can be through words or actions that leave no doubt about their future intentions. For example:
- ✅ Express statement: The party verbally or in writing states their refusal to perform their obligations.
- ✅ Taking steps to prevent performance: The party takes actions that make it impossible for them to fulfill the contract, like selling equipment necessary to complete the job.
Additional Considerations
- 📌 Materiality: Not every breach is significant enough for legal action. The breach needs to be material, meaning it significantly deprives the other party of the benefit they expected from the contract.
- 📌 Good Faith: Both parties to a contract have a duty to act in good faith. This means they should cooperate with each other and avoid doing anything that undermines the contract.
Understanding these different types of breaches can help you identify if a contract has been breached and what legal options you might have.
