We all regularly sign contracts when we buy or sell services and goods in our personal and business lives. Most of the time, a contract protects everyone involved by making sure all parties understand their rights and responsibilities. However, sometimes one party may break the terms set out in a contract.
Sometimes a contract is not in writing and may be verbal or created by the conduct of the parties.
What constitutes a contract breach?
A contract can be broken in one of the following ways:
This is when one party receives less benefit than set out in the Contract. The injured party may seek to recover any losses suffered both as a direct and indirect consequence of this breach.
Sometimes described as a Partial Breach of Contract, is when one party did receive the benefit set out in the Contract, but the other party failed to fully comply with their obligations in some way. For example, the breaching party may have delivered goods or services late, resulting in the other party suffering financial losses.
This is where a breach has not yet occurred, but it is clear one party will not meet the terms of the Contract. One party may have told the other party they will not deliver, or their actions may indicate they will not fulfil their obligations.
This is when the Breach has already occurred, as one party has failed to meet their obligations under the Contract.