Nepedia
Back to Discover
Fluent Reader
📖

Breach of contract

society Maturity 11-13 Next article →

A contract is a serious and binding agreement between people. It is a deal where everyone promises to do certain things. Sometimes, one person does not follow the rules of the deal. This is called a breach of contract. A breach can happen if someone fails to do their job. It can also happen if someone says they will not do it. This is a type of civil wrong.

There are two main ways a breach happens. The first way is an actual failure to perform. This means the person did not do what was promised on time. The second way is when someone shows they cannot or will not do the work. This might happen before the work even starts. This is often called an anticipatory breach. It is also known as a renunciatory breach.

Lawyers and judges group these breaches into three categories. These categories help show how serious a mistake is. The first is a breach of warranty. These are usually smaller mistakes that do not break the whole deal. The second is a breach of condition. A breach of a condition is a much bigger problem. The third type is an innominate term, which is also called an intermediate term.

When a breach happens, the innocent person may receive damages. Damages are usually payments of money. Compensatory damages try to put the person back in the position they should have been in. Punitive damages are different because they punish a person for acting badly. These are only used in very extreme cases. Some cases, like Jarvis v Swans Tours Ltd (1972), even look at disappointment.

Sometimes, a person can end the contract entirely. This is called terminating the contract. You can do this if there is a breach of a condition. You can also do it for a repudiatory breach. A repudiatory breach is so serious it takes away the main benefit of the deal. If a breach is just a warranty, you cannot end the contract. You can only ask for money to cover the loss.

341 words

Where will your curiosity go next?

Keep exploring at your chosen reading level.

More to explore

🔬 Go deeper

More advanced topics to explore

🪜 Step back

Simpler topics to build understanding

What is Nepedia?

A free, ad-free encyclopedia for children. Every article is written at five reading levels, so the same page works for a five-year-old and a fifteen-year-old — use the level switcher above to see this one change. No account needed to read.