The financial encyclopedia uses cookies to improve your user experience. Find out more here!




Contract, breach of


The failure of one party to a contract to perform his part constitutes breach of that contract. It may take the form of (1) renunciation, where one party states that he has no intention of performing his part, (2) one party making the contract impossible to perform, e.g. by destroying the subject matter, or (3) straightforward failure of one party to honour his obligations. Whatever form the breach takes, the aggrieved party has various rights of action. He may sue for damages, or may apply to the court for specific performance. Where a contract is only partially performed then if the plaintiff has accepted the part performance he must pay for it though he may be able to claim on any balance due. He cannot be made to accept part performance only. Similarly, when the contract is only partly performed and the part-performance is expressly or implicitly accepted, the part-performer may sue for work done.

Reference: The Penguin Business Dictionary, 3rd edt.