Answer By law4u team
Breach of contract refers to a violation or failure by one party to a legally enforceable agreement (contract), by not performing their part of the obligations as agreed, without lawful excuse. It is a civil wrong, not a criminal offence, and is governed by contract law. Governing Law in India: The Indian Contract Act, 1872 (still in force and not replaced by BNS, BNSS, or BSA). Civil remedies are available through civil courts, not criminal courts. What Constitutes a Breach of Contract? A breach occurs when: A party fails to perform any promise in the contract. There is a delay in performance. The performance is defective or incomplete. A party refuses to perform their obligation altogether (repudiation). Types of Breach of Contract: 1. Actual Breach Happens when a party fails to perform their duty on the due date or during performance. 2. Anticipatory Breach Happens when one party declares in advance that they will not fulfill the contract. Examples: A builder agrees to complete a house by January but stops work midway — actual breach. A seller tells the buyer in advance that they won’t deliver goods as agreed — anticipatory breach. Legal Consequences of Breach: When a breach occurs, the aggrieved party (non-breaching party) has the right to seek: 1. Damages Compensation for the loss suffered due to the breach. Can be general damages or special damages, depending on the case. 2. Specific Performance Court orders the breaching party to perform their part of the contract (used in real estate and unique goods cases). 3. Injunction A court order restraining a party from doing something that breaches the contract. 4. Rescission The contract is cancelled, and both parties are released from further obligations. 5. Restitution The party who received a benefit must return or compensate for it. Essentials to Prove Breach: To bring a legal claim, the aggrieved party must show: There was a valid contract. They fulfilled their obligations or were ready to do so. The other party failed to perform without justification. There was a loss or damage as a result. Remedies Through Court: The aggrieved party must file a civil suit in a competent court. Limitation period for filing a breach of contract suit is 3 years from the date of breach (as per the Limitation Act, 1963). Not a Criminal Offence: Breach of contract is a civil wrong, not a crime. However, if fraud or cheating is involved, criminal liability under BNS (replacing IPC) may arise, but only in exceptional cases.
