Breach of Contract Examples: Common Types and Their Consequences

breach of contract examples

Every business contract includes terms and conditions that all concerned parties are expected to honor in good faith. But not all the time are these contract obligations fulfilled without reluctance. This, then, gives birth to what is notoriously known as a breach of contract.

Pursuing a legal action is only logical if you find yourself at the receiving end of a contract breach. But besides the legal steps you can take, this article zeroes in on breach of contract examples and their consequences. We’d also provide some valuable contract management tips and how best you can protect your business from contract breaches.

What Is a Breach of Contract?

A contract breach is the failure of one or more parties to fulfill their contractual responsibilities in a legal agreement. In essence, a breach of contract violates the mutually agreed-upon terms and conditions outlined in the binding document.

For the erring party, this nonfulfillment of contract obligations has legal consequences. As for the counterparty to whom the breach is committed, it essentially means wasted business opportunities and economic losses.

Breach of contract example cases include late payments, delayed delivery of services, and absolute failure to perform contractual obligations. Courts get to decide whether a party breached a contract and what corresponding remedies are appropriate and necessary.

Types of Breaches of Contract

There are four main types or examples of breaches of contract. These are as follows:

Minor breach

Also called a partial breach of contract, a minor breach is a party’s failure to deliver promised services on time. It also refers to a contract breach considered minor, hence the term. Be that as it may, it can still hold up in court and require the breaching party to pay damages.

Anticipatory Repudiation

An anticipatory repudiation is a contract breach that indicates a party’s intent to fail its contractual obligations. This usually happens even before the start of the breaching party’s supposed delivery of services. As a legal action, the counterparty may cancel the contract as though it never existed, or file a lawsuit.

Material Breach

A material breach occurs when a company receives goods or services not specified in the agreement. In addition, anything considered a “major” breach falls under this category. This often results in a taxing legal case that will likely culminate in compensatory damages granted to the injured party.

Actual Breach

Lastly, an actual breach refers to a breaching party’s nonfulfillment of its obligations while the contract is already in effect. In consequence, the inconvenienced party can file a lawsuit and demand damages in a court of law. To win this case, adequate evidence must be presented to prove an erring party’s actual breach.

Consequences of Breach of Contract

A breach of contract is a significant risk all companies and businesses must prepare for. Below are the major consequences of a breach of contract.


The most common consequence imposed on a contract-breaking party is compensatory damages. The court would then order the latter to pay damages. The amount of compensation will be based upon the costs that the counterparty needs had the contract not been breached.

Specific Performance

If it is thought that financial reparation wouldn’t suffice as a legal remedy, a specific performance may be ruled instead. This legal consequence obliges the erring party to perform its contractual commitments as originally agreed upon. This can be an ideal resolution for cases where the correct amount of damages is indeterminable.


This legal sanction essentially renders a contract null and void. Rescission works by ensuring that a contract loses all its legal weight and validity. Any services or money that have been exchanged must also be returned. Moreover, contract rescission may be ruled if evidence of fraud, undue influence, and psychological incapacity exists.

How to Protect Yourself From Breach of Contract

Significantly decrease the likelihood of a breach of contract by following these best practices to protect yourself and your business:

Provide unambiguous terms and conditions

A contract’s contents are oftentimes the culprit of every dispute or breach. Hence, it must be unambiguously written so that all parties fully understand their duties. In other words, the terms specified must not be open to interpretation. This is critical in ensuring that every party involved is on the same wavelength.

Get everything done in writing

Besides the original contract, either party may negotiate to make adjustments on certain terms or conditions. If there are any suggested modifications to the already running contract, make sure to document everything in writing. In addition, both parties must duly sign to demonstrate intent to be bound by the legal terms.

Keep manual and electronic copies of the contract

Aside from recordkeeping purposes, having copies of your contract agreements will help on a future legal issue that may arise. Besides the contract itself, you must keep a record of emails, texts, and all correspondence that have been exchanged. Aside from having the paper copies, make sure to have it duplicated as a digital file in a cloud-based storage.

Communication is key

Keep your communication lines open and you must be flexible in terms of feedback or suggestions from the other party. If there are parts that they found rather vague or ambiguous, it must be clarified right off the bat. Open communication helps prevent a more serious legal issue down the road.

Only do business with trusted professionals

It may seem fairly difficult to determine whether a company is trustworthy unless you finally do business with them. Be that as it may, it can be done by researching the organization before an actual contract gets going. Read reviews, and client testimonials, and scrutinize their track record.

Seek professional legal advice

When in doubt, seeking professional legal advice is always a practical solution. A lawyer can give you expert advice about your legal concerns and other matters you feel apprehensive about. With a legal professional in your midst, the chances of a legal case that may arise are significantly reduced.

How Fill Can Help You With Your Contract Management Processes

Contract management is a huge hassle without a digital solution to help streamline your workflow. As such, Fill can help you increase your workforce productivity without sacrificing your contracts’ validity and security. Our integrated solution can help you with the following:

  • Cloud-based storage. For digital archiving and recordkeeping, Fill will securely store your high-level contracts in a centralized online repository.
  • Real-time audit trails. In an ongoing contract signing, you can track document progress and receive real-time notifications and updates.
  • Free templates. If you need professional-looking contracts, you can make use of our free templates and customize them to reflect your brand.
  • Foolproof security measures. To prevent breaches in security, Fill is armed with military-grade encryption protocols. Our tool also runs verification checks and authentication measures to deter unauthorized access to your confidential contracts.
  • Binding eSignatures. Finally, Fill is fully compliant with every law involving the legal use of electronic signatures. You can get your document signed in seconds without compromising industry regulatory compliance.

Fill: A Dependable Contract Management Solution for Your Business

Invest in a trusted eSignature software to streamline your contract management processes. With Fill, you can help increase employee productivity, mitigate risks involving contract breaches, and enhance your document security measures. Using our tool also gives you access to an array of features that will make contract management a breeze.

Choose a cost-effective paperless solution to achieve your long-term business goals. Choose Fill and sign up today for free.

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