Breach of Contract

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Breach of Contract

What is a breach of contract?

A breach of contract happens when one party fails to do what they agreed to do under the terms of a legally binding contract. This could mean not performing a service, delivering faulty goods, missing a deadline, or refusing to pay.

Contracts establish the obligations, rights, and remedies available to each party. When someone breaks those terms, the other party may be entitled to claim compensation or, in some cases, walk away from the agreement altogether.

Breach of contract disputes arise frequently between businesses, between consumers and traders, and between private individuals. The consequences depend on how serious the breach is and what the contract says about remedies.

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Common types of breach

Not all breaches are equal. The law recognises different categories, and the type of breach affects what you can do about it.

  • Minor breach: Sometimes called a partial breach. One party fails to meet a small part of the agreement, but the main purpose of the contract can still be fulfilled. The other party can usually claim compensation for the difference, but cannot treat the whole contract as cancelled.
  • Material breach: A more serious failure that goes to the heart of what was agreed. If a supplier delivers goods that are completely different from what was ordered, this would likely count as material. The innocent party may be able to end the contract and claim damages.
  • Breach of condition: Contract terms are often classified as conditions, warranties, or innominate terms. Breach of a condition, which is a fundamental term of the contract, gives the innocent party the right to terminate immediately and pursue a claim for losses.
  • Anticipatory breach: This occurs when one party makes clear, before the deadline, that they will not perform their side of the bargain. The innocent party does not have to wait for the actual breach to happen. They can treat the contract as ended and seek compensation straight away.

The line between these categories is not always obvious. Courts assess breaches by examining the contract wording, the consequences of the breach, and whether the innocent party has been deprived of substantially the whole benefit they were meant to receive.

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Examples of breach

Breaches can take many forms. Some of the most common include:

  • Not paying for goods or services on time, or at all
  • Failing to deliver what was promised by the agreed date
  • Providing work or products that are defective or not fit for purpose
  • Refusing to carry out agreed obligations without a valid reason
  • Breaking confidentiality terms or other specific clauses

A single late payment may be a minor issue. Repeated non-payment, or a complete failure to deliver, is more likely to be treated as serious.

Whether something counts as a breach can also depend on any exclusion or limitation clauses in the contract. These may restrict what remedies are available, though the Consumer Rights Act 2015 limits how far businesses can go in excluding their liability to consumers.

What you can do about a breach

If someone breaches a contract with you, your options depend on the nature of the breach and what you want to achieve.

For minor breaches, you may be entitled to claim damages to cover your losses. Damages are meant to put you in the position you would have been in if the contract had been performed properly. You cannot usually claim more than your actual loss. Some contracts include liquidated damages clauses that specify a predetermined sum payable on breach, though courts may refuse to enforce these if they amount to a penalty.

For more serious breaches, you may be able to end the contract and refuse to carry out your own remaining obligations. You would still be able to claim for losses you have suffered. In limited circumstances, courts may order specific performance, requiring the breaching party to fulfil their contractual obligations rather than simply paying compensation.

Before taking legal action, it is usually worth trying to resolve the dispute directly. Many contracts include dispute resolution clauses that require negotiation or mediation before court proceedings. Even without such a clause, courts expect parties to have made reasonable efforts to settle.

If you cannot reach agreement, you may need to issue a claim through the courts. For lower value disputes, the small claims track in the County Court is a relatively straightforward option. You can find information about making a court claim on GOV.UK.

For consumer disputes, you may also be able to use an ombudsman or alternative dispute resolution service, depending on the type of contract. Citizens Advice can help you understand your options if you are unsure where to start.

Time limits apply to breach of contract claims. Under the Limitation Act 1980, you generally have six years from the date of the breach to bring a claim. If the contract was executed as a deed, this extends to 12 years.

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Ask Contracts and Agreements a Question
Sukraine 05/01/2021 at 1:14 pm
I sent a parcel with a courier services and paid insurance for it. I sent it on behalf of a friend. The parcel was never received the couriers said it was lost, but when I claimed for the amount I insured if for, they said I needed proof of value as otherwise they wouldn't compensate me. I never had proof of value just what my friend I was sending it for told me and as he bought it ages ago, he has no proof either. The couriers say that under their terms of conditions they don't have to compensate me because I can't prove the value of the item but I paid insurance for that value. In short I've paid to insure against their negligence and now they say their tandCs mean they don't have to pay. This surely can't be right.
Lazyla 29/07/2020 at 4:16 am
I ordered a custom made cnc in April 2020 on a 14 eta of delivery...3 months down the line after paying in full the bloke now says the quote he gave me...1707...he is now over budget for my machine and he would prefer me to have a refund...spoken to C A B and was asked to send a letter for breach of consumer act 2015...customer had 7 days to reply and 14 days for full refund....I have no refund and frightened of the next step as unsure what to do
Allie 29/06/2020 at 2:23 pm
I ordered a tv from Argos. They say it was delivered to me and they got a signature of the letter A. I have not received my TV, I live in a secure building that needs the driver to phone for access and neighbours who were home all day and sat in their lounges overlooking the entrance confirm that no delivery attempt was made. I contacted Argos who say they the driver said they delivered it and they have proof of delivery (The 'A' signature that anyone who can see mg name on the delivery could have done) and they wont refund or replace. They've washed their hands of it! I've been without a tv or my money now since 6th June. They said to contact my debit card provider but they're in the wrong here and as they insist theres proof of delivery even though it's not from me I dont think that's good enough. A company like Argos shouldn't be allowed to do this surely? Their delivery driver could have made a mistake or stolen it for all I know. I just want my tv. My aunts just died and I just want this resolved so I can grieve with my family.
stone 17/03/2020 at 7:24 pm
I employed a maid to clean and take care of my house to be paid at the end of the month;she worked for two weeks and abandoned the job and requested that I pay her for the two weeks worked for. Am I under obligation to pay her
Teebag 13/11/2019 at 12:37 pm
I had an air source heat pump installed and the supplier, Smart Performance, made a written agreement to do two things.
Firstly to do an annual health check / system test as i had paid extra for a special fluid in the heating.
Secondly to carry out annual maintenance on the air pump.
The continued warranty is dependent on both these things. I have repeatedly called, mailed and messaged but they either ignore the messages or just say we will come later. The annual maintenance and checks are now 4 months over due.
Other than taking them to court how can i make them do what they are supposed to do, or get the money from them to pay for another maintenance provider?
Auxillia 23/10/2019 at 8:36 am
Got a loan from the bank and the agreement was to be deducted in five years, the last month being October 2019. The bank has added twenty eight months without my knowledge. What should I do?
Chelsea 17/07/2019 at 12:00 am
Hi
I bought a ground floor flat last year and there is a management company that looks after the buildings and garages we pay an annual fee on top of council tax...the pathway to my back gate has large pots holes and there is a tree extremely close to the building and garages which the management company has known about for last 6 months..they keep saying no money in the pot to get repaired as there are a lot of people who don't pay...iv had a tree surgeon look at the tree and has said no insurance company will pay out for any damages as it's way to close to the buildings and should have been taken down years ago....I'm paying my money...is there any legal way i can go...
Mick1980 30/03/2019 at 12:59 pm
** Late ** in being paid. The QS was either sacked or quit and did not process our December Invoice for £25k.
Shelle1582 04/01/2019 at 3:57 pm
Hi I am a mobile catering business owner. A local company offered me a parking place to keep my vehicle if I rented an office from them which I did for a couple of years under a verbal agreement until they decided they were knocking down the offices. I moved out of the office in August 2017 but was allowed to keep the parking space. We verbally agreed that I could continue parking there and they would arrange different payments for the water and electric I used to keep the vehicle there and plugged in once they had arranged permanent parking after the building work/demolishing was finished. In the last 16months damage has been done to my vehicle on several occasions and still no agreement has been made despite me asking several times. I have not asked the company to cover the cost of the repairs due to the payments not being arranged still and thought it only fair. They are now saying I owe them from June 2017 at the price of the original unit and want it paid by the end of the month. The invoice states it's for the unit that no longer exists and parking. How can they charge me for a non existent building?.... Many thanks
nutcracker74 28/12/2018 at 8:26 pm
We removed our child from a gymnastics class due to my child being bullied by the coach and owner of the club. She (the coach) is now demanding a "terms" money (over £300) in compensation for taking her out before the next season starts. Can she do this under the circumstances?
Omo 23/09/2018 at 12:19 am
Hello,

when my husband received his wages yesterday, he was short pay and he checked with the payroll and ' they said the court brought a letter and asked for £185 plus to be paid to them from his wages and they paid the above amount without informing or seek the consent of my husband. Please is that not breach of contact? my husband was so upset and the employer are saying that he should not be.

Please advice.

Thank you for your time.
EB Editor 17/09/2018 at 11:33 am
@DGSH - you would have to apply to court, unfortunately.
DGSH 15/09/2018 at 10:06 pm
A pony went on loan in Aug 17. The loaner was offered to purchase the pony towards the end of the loan in July 18. However, the loaner is refusing return the pony citing various inaccurate reasons. What do we need to do?
HanN Editor 13/09/2018 at 11:16 am
@Maripon - unfortunately, yes, it is tough luck for you. There is little you can do about this.
JojO Editor 27/04/2018 at 10:38 am
@pat - as long as they give you the deposit back, there's not much you can do.
Tina 31/12/2017 at 3:16 pm
We hired a lighted backdrop and was damaged by wine being spilt on fabric not known by who maybe venue I’m now being threatened with county court. At wedding fayre we signed a agreement form stating only what we were having and how much on date and venue. They never mentioned damages etc I assumed they are covered by their insurance only document I have is a receipt to say I paid cash in full they are trying to make me pay for replacement of whole thing and loss of future weddings how do I stand
HN Editor 19/12/2017 at 10:11 am
@Veljibhai - do you have to pay for the terminal? You'd have to ring them and ask for their complaints procedure first and put in a complaint. This will allow them to try to resolve the issue.
Terri 25/09/2017 at 1:08 pm
I bought a horse with a 14 day warranty the horse was not suitable for my needs , I contacted seller and was told they didn't have the money but would exchange it or resell it on my behalf . I was not told this I expected my money back .
Terri 25/09/2017 at 1:05 pm
I bought a horse with a 14 day warranty, the horse is not suitable for my requirements, I contacted seller and they have said they will exchange it or resell it on my behalf. I just want my money back
RogerU Editor 24/08/2017 at 12:36 pm
@None - if you gave the home-owner a price to do the job, then you have to honour that price, even if it puts you out of pocket.
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