Types of contract breach

When does a breach of contract occur? It is usually as a result of one of the following:-

• There has been a failure to deliver goods or services
• There has been a failure to make a payment within a specified time frame
• Work carried out, goods delivered or services provided have been defective
• A party has refused to perform part of a contract
• Services or products are provided late

Breaches of contract are categorised depending upon how serious they are to the relationship between the parties. They can be categorised as a:

• Minor breach of contract
• Material breach of contract
• Fundamental breach of contract., and
• An anticipatory breach of contract

A minor breach of contract can arise when a service or individual part is substituted for what was originally agreed between the parties in accordance with their contract and yet the contract itself can still be delivered despite the alteration. In other words, the breach only has a minor impact upon the contract.

A material breach of contract arises when there has been a more serious breach that goes to the heart of the contract itself. This generally means that one of the parties would not have entered into the contract without this element being agreed and part of the contract.

A fundamental or sometimes called a repudiatory breach of contract is so severe that the contract itself can be terminated. Termination of the contract is instead of the innocent party seeking compensation or what is known as damages against the offending party as would be the case if the breach were classified as a minor or material breach.

An anticipatory breach is when one party tells the other party to the contract that they will not be carrying out part of the contract or a specific term of the agreement which is still due to take place at a future point in time.

What can you do?

Make sure you have your contract and all associated documents and communication together and begin to consider the implications of what has happened. This will help begin to identify which category of breach the action (or lack of it) falls into.

As it may be possible to terminate the contract, acting promptly is important otherwise you may be deemed to have accepted the breach.

We can help advise you on the nature of a breach and the consequences. This will enable you to decide what steps to take next. Contact our Dispute Resolution team today on 01604 828282 / 01908 660966 or at litigation@franklins-sols.co.uk.