What are the different types of Breach of Contract With Examples?

September 22, 2023    commerciallawyersinperth
What are the different types of Breach of Contract With Examples?

About Breach of Contract –

A breach of contract can take place when the party to a specific contract does not conduct their obligations that are under the agreement. Individuals will find various types of breach of contract that can take place in different sectors.

A breach can also take place when one gets to demonstrate that he/she is unable or is not willing to follow all the obligations mentioned in the contract. Every contract breach will not lead to the termination of the contract. That’s why it’s important to obtain some helpful advice right before terminating the contract.

Read also – Commercial Contract Clauses

The Concept of Contract Breach: A Brief Understanding –

On certain occasions, many individuals confuse contract breaches with phishing or data breaches. But both of them are different cybersecurity and legal concepts.

When two organisations enter a lawful contract, both of them have a high chance of breaching the contract. This can happen when one out of the two parties does not fulfil all the terms of the contract properly.

In the majority of cases, the contract breach takes place when the obligations mentioned in the agreement are not fulfilled in the given time. Here is a small illustration for a better understanding:

“When one signs a rental contract with their tenant, but he/she does not pay up the rent on the given time, it’s viewed as a breach of contract.”

Otherwise, when he/she vacates their apartment without properly clearing the rent of the previous months, they are breaching the contract.”

Different Types of Contract Breaches With Examples –

There are also several forms of contract breaches that can take place, and these are:

1. Minor Breach of Contract –

This is known as a partial breach, where all the terms of an agreement are partly delivered or satisfied. In many situations, the parties will fix or make a good the various disputes and remedy in all those areas where they experienced monetary loss because of the breach.

When one party does not fulfil all their obligations, they will get the chance to claim all the losses from a different side. Here is a small illustration of this matter:

“A minor contract breach can take place where all the defective work is done during a building project. The minor breach can also occur when the supplier of the goods does not supply all the goods needed or several of the parts are missing from the delivery.”

One of the best ways you can fix this problem is when the other party agrees to resolve the problem completely. This can lead to monetary compensation when the party has experienced financial losses because of the contract breach.

2. Material Breach of Contract –

This contract breach is a lot more significant, and it can occur when one of the primary components of the contract is not performed or delivered. Due to such reasons, one party will not get the benefits of the contract.

This type of breach can lead to a severe or great effect on the party who will get all the benefits.

You can opt for many different remedies for the material breach as it’s an excellent way to resolve all the issues. Since this is a significant contract breach, the party will try to terminate the agreement because of it.

When monetary losses are incurred, the other party can opt for the damages and compensation for the losses they have experienced.

3. Anticipatory Breach of Contract –

Even though you will encounter different types of breach of contract, one of them is the “Anticipatory Breach”. This is a type of breach that did not take place.

This is where one party notifies the other party that they will not follow the obligations, which are mentioned under the agreement.

It can also be where a party cannot fulfil or doesn’t intend to follow all the obligations mentioned in the contract.

4. Actual Breach of Contract –

This is known as the original contract breach, where one of the parties did not perform their respective part of the agreement. This type of breach can occur when all the goods you order don’t get delivered.

The actual contract breach can also occur when unsatisfactory work is conducted at the workplace. The commercial lawyers in Perth can provide you with more information on this type of contract breach.

5. Fundamental Breach of Contract –

When the actions of a party causes of breach of contract issues for the other party and they cannot complete the obligations of the contract on time, this is known as a fundamental breach. The distressed or injured party can file a case against the party that breached the agreement.

They can acquire recompense for the damages they have experienced for fulfilling the obligations of the agreement. Here is a small example of it:

“Suppose one is visiting an optical store for a pair of spectacles. The store crates the glasses with the help of a 3rd-party vendor.

Now, the vendor that the store hired stopped making glasses for them. So, the optical store will not be able to fix the glasses of one’s chosen frame.

Through this illustration, one can clearly see that a fundamental breach has taken place. One neither gets the spectacles, nor they paid the optical store. In addition to that, the store manager was not liable to conduct any type of obligation to the 3rd-party vendor.

6. Implied Breach of Contract –

This is a type of breach that takes place when something is not mentioned within the agreement, but it’s understood to be a part of the contract. A breach of this type of obligation is called an implied breach.

To understand this breach properly, let’s take a look at an example – “A firm hired a content writer to create newsletters and content resources for their business. The contract signed between the content writer and the company mentions all the payment terms, timelines and deliverables.

However, the contract does not mention that the company will be responsible for offering the content writer all the important materials and information to finish the project.

But it’s implied that the firm will offer this information so that the writer can fulfil their obligation. If the company does not provide the information, it will be termed as an implied contract breach.”

Wrapping Up –

One will come across many kinds of contract breaches that take place in various industries. The breaching of a contract occurs when one party does not fulfil all the obligations mentioned in the agreement. He/she can gain more about contract breaches from professional and experienced Commercial Lawyers Perth as they have helped many of their clients in such matters.

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