Breach of Contract
A failure by one party to fulfill their obligations under a legally binding agreement, entitling the other party to legal remedies.
A breach of contract occurs when one party to a valid contract fails to perform a required duty without a legal excuse. Breaches can be material (significant enough to defeat the purpose of the contract and entitle the non-breaching party to cancel and sue for damages) or minor (a deviation that does not defeat the contract's purpose but entitles damages for the shortfall).
To prove breach of contract, the aggrieved party must establish: a valid contract existed, they performed their obligations, the other party failed to perform, and they suffered damages as a result. Damages typically aim to put the non-breaching party in the position they would have been in had the contract been performed.
Common breaches include contractors failing to complete work, sellers backing out of real estate deals, employers violating employment agreements, and service providers failing to deliver. Written contracts with clear terms make breach cases far easier to prove than oral agreements.
Real-World Example
After the contractor abandoned the renovation with only 60% of the work done, the homeowner sued for breach of contract and recovered $18,000—the cost of hiring another contractor to finish.