If the other side has failed to do what a contract says, you may be able to claim compensation or other legal remedies. A breach of contract is a failure, without a valid legal excuse, to perform what a legally binding agreement requires, and the steps you take early on can shape the outcome.
This guide explains what counts as a breach of contract, the types of breach, the remedies available and how contract claims normally progress in England and Wales.
It is general information, not advice on your own case. If you are unsure where you stand, Axis Solicitors’ civil litigation team can review your contract and supporting evidence and advise you on the appropriate next steps.
What Is a Breach of Contract?
A breach of contract occurs when one party fails to perform its contractual obligations as agreed. That can mean not performing at all, performing late, or performing in a way that does not match the contract terms. A valid contract can be oral, written, or inferred from conduct. Consumer contracts offer additional protections under the Consumer Rights Act 2015.
A claim usually depends on four key elements:
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Valid contract: there must be a legally binding agreement between two or more parties, with an offer, acceptance, payment or other benefit exchanged (called consideration) and an intention to be bound.
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Contractual obligations: the contract terms must have required the other party to do, or not do, something specific.
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Actual breach: the other party failed to meet those obligations without a valid legal excuse.
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Financial loss: the innocent party has suffered loss, or can otherwise justify a remedy.
Contracts do not need to be written. Verbal and implied agreements can be legally binding, although a well drafted contract makes a breach far easier to prove.
Prevention Steps Before a Breach Occurs
You can prevent a breach of contract and consequential damages with the following steps:
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Draft clear, unambiguous contract terms to prevent disputes.
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Use Contract Lifecycle Management software to track obligations.
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Make sure that contract explained to all the parties involved.
Common Examples of Contract Breaches
Contract breaches take many forms, in both consumer and commercial contracts. Typical examples include:
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A supplier who fails to deliver goods, or delivers goods that do not match the agreed specification.
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A missed deadline for building work, software delivery or another service.
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Non-payment of an invoice or a failure to pay in full.
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A breach of confidentiality, exclusivity or non-compete terms.
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A party that refuses to perform further obligations after a dispute.
The facts matter in each case. A missed deadline, for example, may be a serious problem if time was stated to be of the essence, but far less serious if the contract allowed flexibility; a short delay will not usually justify ending the contract unless timing was essential.
What Are the Different Types of Breach of Contract?
Not every breach has the same legal consequences. The type of breach decides what the injured party can do next. There are four main types of breach: minor, material, anticipatory, and repudiatory.
Minor Breach
A minor breach affects only a small part of the contract. The contract’s purpose is still largely achieved, so the innocent party normally has to keep performing its own side.
In most cases, the common remedy for a minor breach is financial compensation for any loss caused, while the contract usually continues. You would not usually be entitled to end the contract altogether.
Material Breach
A material breach is serious enough to defeat a substantial part of the contract’s purpose. It is sometimes described as a fundamental breach, although courts now tend to focus on whether the breach is repudiatory.
Repudiatory Breach
A repudiatory breach, also called a repudiation, is one so serious that it entitles the non-breaching party to end the contract and seek damages. It may arise where one party shows it no longer intends to be bound, or where the failure removes most of the benefit of the contract.
The innocent party can choose to accept the repudiation and end the contract, or affirm it and carry on. Under common law, ending the contract without that threshold being met can expose the terminating party to a counterclaim. Affirming for too long can mean losing the right to terminate, so prompt advice is important.
Anticipatory Breach
An anticipatory breach happens before performance is due, when one party makes clear it will not perform. For example, a supplier states in writing that it will not deliver next month.
The innocent party may be able to treat the contract as ended straight away and claim damages, without waiting for the deadline to pass.
Difference Between Partial Breach and Actual Breach
A partial breach means the breaching party has performed some, but not all, of what was promised. An actual breach is where performance is due and simply does not happen or is defective.
| Type of breach | What it means | Usual position of the innocent party |
|---|---|---|
| Minor breach | Small failure, contract largely performed | Claim damages, contract normally continues |
| Material breach | Serious failure going to the heart of the contract | May claim damages and, if repudiatory, end the contract |
| Repudiatory breach | Failure that shows the party will not be bound, or removes the main benefit | Choose to end the contract or affirm it, plus damages |
| Anticipatory breach | Party signals in advance it will not perform | May act before the performance date |
Is Every Breach Actionable? Valid Legal Excuses
Not every breach gives rise to a successful claim. A party may have a valid legal excuse, which means the failure is not treated as a breach and commercial disputes can be prevented.
Examples can include:
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Frustration: an unforeseen event makes performance impossible or radically different, without fault on either side.
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Force majeure: the contract itself excuses performance for listed events, such as natural disasters, if the clause applies.
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Misrepresentation, duress or lack of capacity: the contract may be voidable (can be set aside), or not binding at all.
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Prior breach by you: if you did not perform your own obligations, the other party may have a defence.
At Axis Solicitors, our civil litigation team often begins by reviewing the contract and the surrounding documents to see whether a defence of this kind is likely to be raised against you. You can read more about assessing the merits in our guide on the key factors in a strong civil litigation case.
What Legal Remedies Are Available for a Breach of Contract?
There are several legal remedies for a breach of contract. The right one depends on the facts, the seriousness of the breach, and the potential remedies the law allows, as well as the loss suffered and what the injured party actually needs.
Damages (Monetary Compensation)
Monetary damages are the usual remedy. A damages award aims to put the innocent party in the position it would have been in if the contract had been performed, so you can claim damages for the financial loss caused by the breach.
You can generally recover damages only for losses that were reasonably foreseeable when the contract was made. Under English law, limits such as causation, remoteness, foreseeability and mitigation may restrict a damages award.
Specific Performance
Specific performance is a court order requiring the breaching party to carry out what it promised. It is a discretionary remedy, which means the court decides whether to grant it.
Courts usually order specific performance only where damages would not be enough, for example where the subject matter is unique, such as land or a rare item. It is rarely ordered for contracts of personal service.
Injunction
An injunction is a court order to stop a party doing something, such as breaching a confidentiality or non-compete clause. Like specific performance, it is a discretionary remedy.
Contract Rescission
Contract rescission cancels the agreement and aims to restore both parties to their original positions. In practice, restitution requires the party who received a benefit under the contract to return its value so both sides are restored as far as possible. It is more often used where the contract was induced by misrepresentation than for a simple failure to perform.
Liquidated Damages and Other Contract Terms
Some contracts fix the amount payable on a breach in advance, called liquidated damages. These clauses are generally enforced if they are a genuine attempt to estimate loss, but not if they operate as a penalty.
For more on how disputes between businesses arise and are resolved, see our article on commercial disputes and civil litigation.
What Should You Do If the Other Party Breaches the Contract?
Act promptly, stay organised and avoid steps that could weaken your legal position. The following reasonable steps should be taken when a breach of contract is occurred.
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Gather relevant documents: the contract, emails, messages, invoices, delivery records and notes of any calls.
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Check the contract terms: look for notice requirements, termination clauses, limits on liability and any dispute resolution or jurisdiction clause.
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Record your loss: keep evidence of the financial loss you have suffered and the steps you are taking to reduce it.
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Seek legal advice: an early review can clarify your legal position before you end the contract or send a formal demand.
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Write to the other party: a letter before claim sets out the breach, what you want and a reasonable deadline.
Be cautious about ending a contract without advice. If you terminate when you were not entitled to, you could become the breaching party yourself.
Can You Resolve a Contract Dispute Without Court Proceedings?
Yes, and the courts expect you to try. Before court proceedings begin, the parties are normally expected to exchange information and consider settlement under the pre-action protocols and Practice Direction on pre-action conduct.
Common options include:
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Direct negotiation: talking to the other side, often the quickest and cheapest route.
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Mediation: a neutral third party helps both sides reach a voluntary agreement.
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Arbitration: a neutral third party decides the dispute, often where the contract requires it, and unlike mediation it usually ends with a binding decision.
These methods are forms of alternative dispute resolution. Courts can take into account an unreasonable refusal to try them when deciding costs, so early resolution is worth serious thought.
How Long Do You Have to Bring Contract Claims?
You normally have six years from the date of the breach to start a claim. Section 5 of the Limitation Act 1980 says an action founded on a simple contract cannot be brought after six years from when the cause of action accrued (arose).
For contracts executed as a deed, the period is usually 12 years. Time can be extended in limited cases, such as fraud or deliberate concealment.
Missing the deadline can end a claim, however strong it is. If your breach occurred some years ago, seek legal advice without delay.
What Happens If Contract Claims Go to Court?
If a dispute cannot be settled, the claimant issues a claim form and the defendant responds. The court then gives directions, which are instructions on the steps and timetable, and the case may be allocated to a track based on its value and complexity. For a closer look at the process locally, see how civil litigation works in Manchester County Court.
Claims worth £10,000 or less are usually allocated to the small claims track, while larger or more complex disputes use a more formal process. Disclosure of documents, witness statements and a trial may follow.
If you succeed, the court can award damages or make a court order for specific performance or an injunction. For trial planning, see our guide to preparing for a civil litigation trial.
How Axis Solicitors Can Support Your Contract Dispute
Our civil litigation team can assess your position and advise on the most suitable route. Axis Solicitors is authorised and regulated by the Solicitors Regulation Authority (SRA No. 653526), with offices in Manchester, Birmingham and London.
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Civil Litigation: we review the contract, assess whether a breach has occurred and advise on pursuing legal action, negotiation or court proceedings.
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Business Immigration: if your dispute involves a sponsored worker or a visa-related commercial agreement, this team can advise on the immigration side of the issue.
Frequently Asked Questions
What counts as a breach of contract?
A breach of contract is any failure to perform contractual obligations without a valid legal excuse. This includes non-performance, late performance and defective performance.
Can I sue for breach of contract if nothing was in writing?
Yes. A verbal or implied agreement can be a legally binding agreement, although proving its terms is usually harder without documents.
What is the difference between a minor breach and a material breach?
A minor breach affects a small part of the contract and normally leads to damages only. A material breach goes to the heart of the contract and may allow the innocent party to end it.
How much compensation can I recover for a breach of contract?
You can usually recover the foreseeable financial loss caused by the breach, less any amount you could reasonably have avoided. The figure depends on your evidence and the contract terms.
Can I end a contract if the other party has breached it?
Yes, but only if the breach is repudiatory or the contract gives you a right to terminate. Ending it wrongly can leave you in breach, so take advice first.
Do I have to go to court to claim for breach of contract?
No. Many disputes are settled through negotiation, mediation or other alternative dispute resolution before court proceedings start.
Speak to a Solicitor About Your Breach of Contract Claim
If you are considering a claim, or have received one, our civil litigation service can review your documents, explain your options and help you decide on the next step. If you are unsure how strong your position is, our guide to first consultation with a civil litigation solicitor explains how we begin.
To speak to a solicitor at Axis Solicitors, please contact our team.
