Breach of contract meaning and types of breach of contract are discussed in this article. Simply, the breach of contract means, when one of the contracting parties failed to perform his contractual obligations or breaks the terms and conditions of the contract, then the contract is said to be breached.
What is Breach of Contract Meaning?
What is breach of contract meaning? Here, the meaning of breach of contract in the contract law, when one party fails or refuses to perform his/her contractual obligations or promise then the contract is said to be breached contract.
In other words, the breach of contract means, when one of the contracting parties failed to perform his contractual obligations or breaks the terms and conditions of the contract, then the contract is said to be breached.
A breach of contract may occur in various ways such as if one contracting party failed to pay the amount for the delivery of goods, or the other party failed to supply the goods within the prescribed time.
Types of Breach of Contract
Types of breach of contract are provided in the Indian Contract Act. There are 4 breach contract types. These types of breach of a contract are;
- Material Breach of Contract
- Breach of Contract by Minor
- Anticipatory Breach of Contract
- Actual Breach of Contract
1. Material Breach of Contract
Material breach of contract in the contract, when one party receives less benefit or an unexpected result which is specified in the contract from the other person then the material breach of contract occurs.
The material breach of contract is considered the most severe type of breach of contract.
In a material breach contract, the party can pursue damages relating to breach of contract and both its direct and indirect effects.
The material breach of contract can happen in the following two ways;
1. When one of the contracting parties failed to perform contractual obligations agreed during the formation of the contract.
2. When one of the contracting parties failed to perform contractual obligations at a prescribed time during the formation of the contract.
Example: If you purchased a desktop from online or any commerce website, and if they just delivered a monitor then there is a material breach of contract.
2. Minor Breach of Contract
Minor breach of contract is also known as immaterial breach of contract or partial breach of contract. A minor breach of contract occurs in a situation where the important aspects of a contract were received but some part of the contractual obligation is not present.
Sometimes there is recourse to legal action, however, in the case of a minor breach, it’s hard to show damages as a result of a minor breach.
Example: If you purchased a smartphone through an online e-commerce website and they delivered your smartphone but the sim ejector tool was missing in the box. Here, the company can send the sim ejector tool to you then there is no harm. This is called a minor breach of contract.
3. Anticipatory Breach of Contract
Anticipatory breach of contract meaning is the anticipatory breach of contract takes place where it occurs when one of the contracting parties acknowledges that they won’t be able to fulfil their contractual obligation agreed-upon time of formation of the contract.
So, if this usually happens then the party who breached the contract notifies the other party of their inability to fulfil their contractual obligations.
Example: If a service/good is delivered on a monthly basis and the receiver says they won’t be paying for a month but still expect the service, that would be an anticipatory breach of contract.
4. Actual Breach of Contract
Actual breach of contract is the fourth and final breach on our list is also the most common way a contract gets breached. An actual breach of contract is it comes time for one party to deliver on their side of the contract and they either improperly or incompletely perform their duties.
If this type of breach happens, there are a few options for a remedy that the wronged party can pursue. This ranges from compensatory damages that address any immediate or direct economic losses resulting from the breach. To indirect losses that go beyond the value of the contract but are a direct result of the breach.
Example: A service is paid for and either never received or it’s subpar and results in loss of business.
Breach of contract meaning and the types of breach of contracts are discussed in this article. When one party breaks the terms and conditions of the contract, then we can say the contract is breached, and the other party can file a suit against the party who failed to perform his contractual obligations.
- Law of Contract – Bare Act 2021 Edition Professional
- The Indian Contract Act 1872 Bare Act 2021 Edition
- Law of Contract & Specific Relief Dr Avtar Singh Latest Edition-2020
- Pollock & Mulla – The Indian Contract Act, 1872
- CONTRACT Paper I – By R.K. Bangia [Edtion 2019 – 2020]
- CONTRACT Paper-II – By R. K. Bangia
- NOTES ON INDIAN CONTRACT ACT 1872: BEST NOTES FOR LAW STUDENTS