Category: Contract basics
Breach of contract
A failure to perform a contractual obligation — missing a payment, failing to deliver a product, or otherwise not doing what the contract required.
A breach of contract happens when one party fails to do something the contract required them to do. Missing a payment deadline. Not delivering on time. Failing to meet a specification. Ending the engagement early. These are all breaches.
Not every breach ends up in court. Most of them get resolved by notice-and-cure: one side sends a formal letter saying "you're in breach of clause X, and unless you fix it within Y days, we'll pursue remedies." Most problems get fixed at this stage because the alternative is expensive for everyone.
The two categories that matter:
**Material breach.** A failure so significant that it defeats the main purpose of the contract. The vendor doesn't deliver the software. The customer doesn't pay for six months. The consultant discloses confidential information. Material breaches usually let the non-breaching party terminate the contract and sue for damages.
**Immaterial breach** (sometimes called "minor" or "partial" breach). A violation that doesn't defeat the purpose of the contract. The vendor delivered on time but missed a minor feature. The customer paid a day late. These typically don't let you terminate — you can sue for the specific damages, but the contract continues.
Whether a breach is material is one of the things parties argue about most. "They're in material breach, we're terminating" vs. "that's an immaterial issue, they can't terminate" is the start of a lot of contract disputes.
Remedies for breach, in rough order of frequency:
**Damages.** Money. Either "expectation damages" (what you would have gotten if the contract were performed) or "reliance damages" (what you spent based on the contract). Most contract cases are about money.
**Specific performance.** A court order forcing the breaching party to do what they promised. Rare in commercial contracts — courts don't love micromanaging businesses — but common in real estate.
**Injunctive relief.** A court order stopping the breaching party from doing something. Common in confidentiality and non-compete cases.
**Termination.** Ending the contract. Usually the non-breaching party's right after a material breach.
For small businesses, the thing worth internalizing: most breaches don't turn into lawsuits. They turn into awkward emails, delayed payments, and eventually a negotiation over how to unwind the relationship. Contract tracking (knowing what you agreed to in the first place) prevents most breaches from happening at all — you can't accidentally breach obligations you're actively monitoring.