Elements of a breach of contract

Written by abby lane
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Elements of a breach of contract
Breach of contract is a civil matter. (Getty Premium images)

Breach of contract occurs when one party to a contract fails to perform any term of the contract without a valid legal reason. Anticipatory breach occurs when a party indicates by words or actions that she will not perform any term of the contract. A claim for breach of contract will not succeed unless the plaintiff can prove she suffered damages as a result of the breach.

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Valid contract

A valid contract arises when there is an offer, an acceptance and consideration. Consideration is present when both parties enjoy benefits from the contract and both parties suffer a detriment as a result of the contract. Generally, both parties must have the capacity to consent. Most commonly, minors do not have the capacity to consent to most contracts. The parties must intend to enter into the contract. Undue influence, duress and fraud all negate intent. Finally, the contract must be legal; the court will not recognise breach of an illegal contract.

Breach

The person who does not perform a term of the contract has committed breach and will be the defendant. The other party, the innocent party, will be the plaintiff. Failure to perform any term of the contract, even a minor term, is a breach. When one party breaches, the other is excused from performance under the contract.

Conditions precedent satisfied

A condition precedent is an event that must occur before the parties are required to perform under the contract. For example, a contract may oblige Person A to shovel snow from the driveway of Person B. The occurrence of snow is a condition precedent to the contract. If it does not snow, Person A does not breach the contract by not shovelling.

Notice

The plaintiff must notify the defendant of the breach. This requirement ensures that the defendant knows of the breach and, if the breach was innocent, allows the defendant time to cure the breach. The terms of the contract should detail how to give proper notice.

Damages

The plaintiff must have suffered real damages as a result of the breach. The plaintiff must show that had the breach not occurred, she would not have been damaged. The proper damages award will put the plaintiff in the position she would have held had the breach not occurred -- to make her whole. Damages are not intended to punish the breaching party.

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