BREACH OF AGREEMENT

A breach of agreement can be classified into different types, including minor, material, anticipatory, or fundamental breaches, depending on the nature and impact of the violation. A minor breach may involve small deviations from the contract terms, such as a delay in delivery, while a material breach refers to a failure that strikes at the core of the agreement, making it impossible for the other party to receive the intended benefit. An anticipatory breach occurs when one party indicates, through words or actions, that they do not intend to fulfill their obligations even before the performance is due. When a breach occurs, the aggrieved party has several legal remedies available under contract law. These may include claiming compensation for damages, seeking specific performance (forcing the breaching party to carry out their contractual duty), or rescinding the contract entirely to avoid further losses. In some cases, the affected party may also be entitled to restitution, which aims to restore them to the position they were in before the contract was made. To minimise risks, many contracts include dispute resolution clauses, specifying how conflicts will be handled—such as through negotiation, mediation, arbitration, or litigation. These mechanisms help resolve disputes efficiently and reduce the burden of lengthy court proceedings.

Description

A breach of agreement occurs when one party fails to fulfill its obligations under a contract, which is a legally binding agreement between two or more parties. Contracts specify the rights and responsibilities of each party involved, laying out terms and conditions that govern their interactions and transactions. When a breach occurs, it typically involves one party not performing as promised or stipulated in the contract.

There are several types of breaches that can occur:

1. Material Breach: This is a serious breach that goes to the root of the contract and deprives the innocent party of the benefit they expected from the agreement. For example, failing to deliver goods or services as specified in the contract.

2. Minor Breach: Also known as a partial breach, this occurs when the breaching party has not completely failed to perform their obligations, but has not done so fully or correctly. The innocent party may still receive some benefit, but not in the manner or quality originally promised.

3. Anticipatory Breach: This occurs when one party indicates, through words or actions, that they will not perform their obligations under the contract. This can happen before the actual performance is due, giving the innocent party the right to terminate the contract and sue for damages immediately.

Frequently Asked Questions

Browse practical answers curated by our CA and CS desks for BREACH OF AGREEMENT.

Understanding Breach of Agreement

A breach of agreement occurs when one party fails to fulfil its obligations under a legally binding contract. It may involve non-performance, late performance, or doing something that violates the contract terms.

The four main types are:

  • Actual breach – failure to perform on the due date.
  • Anticipatory breach – one party declares before the due date that they won’t perform.
  • Partial breach – only part of the obligation is breached.
  • Material breach – a serious breach that defeats the contract’s main purpose.

Yes. Even verbal contracts can be legally binding if they meet basic requirements like offer, acceptance, and consideration. However, written contracts provide stronger evidence in case of a dispute.

Any party who has fulfilled (or is ready to fulfil) their contractual obligations and has suffered loss due to the other party’s default can file for damages or specific performance.

Legal Remedies and Consequences

The main remedies include:

  • Damages (monetary compensation)
  • Specific performance (court orders the defaulting pa

Damages are typically based on the actual loss suffered due to the breach, as per Section 73 of the Indian Contract Act, 1872. Courts may also grant nominal or exemplary damages depending on the circumstances.

Only if the breach is material or if the contract specifically allows termination for such a default. Minor breaches usually require notice and a chance to rectify the issue.

In cases of mutual breach, courts examine who committed the first substantial breach. The party that caused the first breach typically loses the right to enforce the contract.

Process, Defences, and Resolution

You should:

  • Review the contract terms and breach clauses.
  • Collect supporting evidence (emails, invoices, messag

Common defences include:

  • The contract is void or unenforceable.
  • Performance became impossible (force majeure).<

The limitation period is three years from the date of breach, as per the Limitation Act, 1963. It’s best to act quickly to preserve evidence and rights.

No. Many contracts contain arbitration or mediation clauses. Disputes can often be settled through negotiation or alternative dispute resolution before going to court.

BizPriest’s Role and Support

BizPriest helps review your contract, assess the breach, draft legal notices, guide you through settlement or litigation, and coordinate with legal counsel for resolution.

BizPriest collaborates with experienced legal professionals and corporate lawyers who can represent you in court, while our experts handle all procedural and documentation support.

Yes. BizPriest provides breach-of-agreement support for individuals, startups, SMEs, and established corporations across India.

 Timelines depend on the complexity of the case and the resolution method — mediation may conclude in weeks, while litigation can take several months. BizPriest ensures every step is handled efficiently to save your time and resources.

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