- Meaning and Definition
Breach of contract means non fulfillment of obligations which a contract imposes. Every contract is formulated with intention to perform it or for the fulfillment of the obligations. When the party fails to fulfill the obligations under contract as prescribed or reasonable time and manner it is called breach of the contract. A breach of the contract is just opposite to a performance of contract and it can be said non-performance of the contract. When the one party breaks the contract, the other party may become victim. On such case he has two options either "free from the contractual obligations by the notification to termination of the contract from the very moment of the breaching of contract" or "to seek remedy for specific performance of contract as well as compensation for loss".
Where a party to a contract fails to fulfill obligations under the contract within the fixed time or within a reasonable time or expressed his intention not to fulfill obligations under the contract, is called breach of contract.
Whenever a party breaks the contract, the other innocent party will be relieved from performing the contract and he can rescind (cancel) the contract by sending a notice to the other party. When the contract is breached aggrieved party can sue for his loss. Sec. 82(2) of NCA 2056
A breach of a contract includes the following elements:
- If the party fails to fulfill obligations under the contract.
- If the party gives information to the other party that he will not perform the work as mentioned in the contract.
- If by action and conduct the party seems to be incapable of performing the work as mentioned in the contract.
- If a breach of contract may be committed by words spoken or written or by conduct.