What is 'Breach Of Contract'
Breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. This breach could be anything from a late payment to a more serious violation, such as failure to deliver a promised asset. A contract is binding and will hold weight if taken to court; however, proof of the violation is imperative.
BREAKING DOWN 'Breach Of Contract'
Sometimes the process for dealing with a breach of contract is written in the original contract. For example, the contract may state that in the event of a late payment, a fee of $25 must be paid along with the missed payment. If the consequences for the specific violation are not included in the contract, the two parties can settle the situation themselves, which often leads to a new contract, or legal action can be taken.