Dictionary

Breach of contract

There are two types of breach of contract which gives rise to a legal cause of action that enables a party to seek a remedy. These types of breaches are:

  1. Failure to perform; and
  2. Anticipatory breach.

The failure to perform a contractual obligation will occur when, among other things, a party fails to complete their obligations under a contract within the essential time period acknowledged in the contract. The corollary of this is that a breach for failure to perform will only occur after the time for performance of a contractual obligation has expired.
Alternatively, an anticipatory breach of contract occurs before the time for the performance of a party’s contractual obligations. In these situations, a party will put the other on notice of their unwillingness to or inability to comply with their contractual obligations (i.e. a repudiation).

The usual remedy for a breach of contract is damages, whereby the general rule is “that when a party sustains loss by reason of a breach of contract. He is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed” (Robinson v Harmer (1848) 154 ER 363).