Forms of contract breach

A contract breach usually takes one of the following four forms: 

1. Actual breach: In an actual breach, the party doesn’t intend to perform as promised. In this case, the party commits an alleged breach of the contract. Take, for instance, a catering services business that doesn’t meet its contractual obligations, wherein it has promised to use pesticide-free vegetables in its dishes. Here, the breaching party, despite having the availability to procure the vegetables, doesn’t do it. It can be considered a material breach of the contract. Minor and material breach of contract are both subcategories of an actual breach.
2. Material breach: A material breach occurs when a person involved in an agreement fails to perform as promised. In other words, when the non-breaching party receives a different product than what was promised or fewer products than the contract requires. For example, a clothing company promises to deliver 100 cotton apparel to a retail store. But the company actually delivers apparel that is a mix of cotton and satin.
3. Minor breach: A minor breach happens when the breaching party delivers the products or services as promised, but some items might be missing. We’ll use the same example above. In this case, the clothing company does deliver cotton apparel but could provide only 75. Here, the clothing company has committed a minor or partial breach, and their failure to deliver 25 pieces of apparel requires a detailed course of action.
4. Anticipatory breach: In this breach, the breaching party informs the other that they won’t be able to fulfill certain obligations of the agreement for a valid reason. For instance, a car manufacturing company stops building cars due to the unavailability of raw materials. Here, the manufacturer is unable to meet their duties because of a shortage. Another example could be when a business has to stop its operations due to a natural calamity like a flood or fire. The breaching party can notify the other party about it and keep them on the same page.

Include all the essential details in the contract breach notice

Make your notice as specific as possible. This may guard against later claims that the breaching party did not receive full information or that, by ignoring a violation, you tacitly waived your enforcement rights.

Review the breach of contract notice provision carefully before sending it to the breaching party

Review the underlying contract carefully before you send the breach notice. Many contracts include specific provisions governing breaches and remedies. If your original agreement contains such provisions, read through it and follow the procedures detailed.

Use a professional tone in your letter referring to a breach

The non-breaching party should use a courteous and professional tone in their breach of contract form. Aggressive or contentious language will not resolve the problem any faster. The breach can be an oversight, and you may be able to preserve and develop your working relationship if you handle the matter professionally.

Seek an attorney’s help to preserve your legal rights

If the breaching party doesn’t respond to your notice and the breach hasn’t been cured within the designated period, contact an attorney to discuss additional legal action and remedies.

Consider sending your notice by registered or certified mail. Although not strictly required, it will support your case if later court action becomes necessary.

No matter what the breach, an agreement will not terminate automatically. If a breach of an essential term has occurred, one party may have the option to end the contract. However, there are usually still notification and termination requirements that must be met.

What details should be provided in a breach of contract notice?

Details included in a notice of breach letter

In a notice of breach letter, you should provide the name of the breaching and non-breaching party. You must also include details regarding the original agreement for which a particular breach has occurred.

Explain clearly how the other party breached the agreement. Include references to the breached provision(s), quote the language of that/those section(s), and describe how the actions of the other party created the violation.

Enter the “Effective date” of the agreement, if any. If there is no effective date listed, enter the date on which the last party signed.

Be thorough. As you read through the contract, examine all of the other party’s responsibilities and obligations, and consider if and how that party is in breach of any of them.

Timeline for remedial actions

Enter a deadline by which the other party must remedy its breach. This deadline should be in accordance with the nature of the breach (e.g., larger issues can take a longer time to cure, but major problems might require immediate resolution). You must also review the terms of your original agreement to determine if there is an established remedy period. If so, indicate the section of the contract in which that limit is provided and follow the terms of that provision.

Frequently asked questions

What's a breach of contract notice?

When someone with whom you're working through a contract fails to keep up their part of the deal, that's called a breach of contract. Remind business partners about their unmet contract obligations with a breach of contract notice. Fortunately, a reminder of these obligations and a correctly worded warning are often enough to get a business relationship back to work and make it right by fulfilling their side of the contract.

What information is required to complete a breach of contract notice?

The information you'll need to have to complete your breach of contract notice is:

• Who it's coming from: Determine if a business or individual is sending the document and have the name and contact information ready
• Who it's going to: Know who this document is going to and have the individual or business name and contact information ready
• Subject matter: Have the original contract handy and a summary of the portion of the contract that has been violated or is unfulfilled
• Dates: Be clear about the original contract's timeline, including the start date