Breach of Contract – What does this mean?

A breach of a contract means the failure of one party to meet that party’s obligations in an agreement. This can come about by either doing something a person was obliged not to do or failing to do something they were obliged to do.

What are the legal consequences of this clause?

The legal consequences of a breach of contract will depend on the remedies provided for in the agreement and whether the breached term was a material term of the contract.

A typical breach clause in a contract will provide for a notice of breach to be delivered from the one party to the party in breach and a time period within which the breach is to be rectified.

If the agreement does not set out the time period, then a period that would be considered reasonable must be provided in the notice of breach. What is reasonable will depend on the circumstances.

If the notice period expires and the breach is not rectified, the usual remedies available are to either cancel the agreement or seek enforcement of the agreement by calling for specific performance. Compensation could also be claimed for any loss or damages suffered as a result of the breach.

Our tip for dealing with the Breach clause

Ensure that the breach clause provides remedies for both parties in the event of breach. For example, some lease agreements only set out remedies for the landlord in the event of breach by the tenant, but not the other way around. You should also ensure that the time period provided for the rectification of the breach is appropriate for the circumstances of your agreement.

For more information, please contact us or send an email to vicky@fouriestott.co.za.