The Procurement Glossary » Breach of Contract

Breach of Contract

Contracts & Legal

Definition

A failure by one party to perform an obligation under a contract without a lawful excuse.

Explanation

Breaches range from minor to material; a material breach can entitle the other party to terminate and claim damages. Contracts define remedies, cure periods and consequences so responses are predictable rather than litigated from scratch.

Example

Repeatedly missing the delivery SLA becomes a material breach, letting the buyer terminate for cause.

Related terms

• Liquidated Damages — A contractually fixed sum payable by a supplier for a specified breach, agreed in advance as a genuine estimate of the buyer's loss.
• Termination for Cause — Ending a contract because the other party has materially breached it, usually after a chance to remedy the breach.
• Service Level Agreement (SLA) — A contractual commitment defining the level of service a supplier must deliver, with measurable targets and consequences for missing them.
• Dispute Resolution — The contractually agreed process for resolving disagreements — often escalation, then mediation or arbitration, before litigation.

Frequently Asked Questions

What is Breach of Contract?

A failure by one party to perform an obligation under a contract without a lawful excuse. Breaches range from minor to material; a material breach can entitle the other party to terminate and claim damages. Contracts define remedies, cure periods and consequences so responses are predictable rather than litigated from scratch.

Can you give an example of Breach of Contract?

Repeatedly missing the delivery SLA becomes a material breach, letting the buyer terminate for cause.

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