breach of contract

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Breach of Contract

The nonperformance of a contract by one of its parties, or the interference by the party in the other party's performance. For example, if a company has a contract to build a house and does not build it, or does not build it to proper specifications, the company may be in breach of contract. Breach of contract entitles the offended party to sue and to collect damages resulting from loss of value he/she has suffered. Depending on the nature of the breach, the contract may be irreparably harmed and the offended party may be exempted from performance on his/her part.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

breach of contract

A violation of some or all of the terms of a contract. Most contracts spell out specific remedies in the event of breach, but include a basket granting any and all other remedies allowed at law or equity.Some states have statutes making defaulting parties liable for the attorneys' fees of the other side;other states do not have such laws and attorneys'fees are recoverable only if that right is granted in the contract.

• In a real estate context, some purchase contracts provide that a breaching buyer will lose his or her earnest money but not be responsible for any other damages. If not so specified as a limitation on damages, then a breaching buyer is fully responsible for all the seller's damages, which could include losses when the property is sold for a lesser amount, costs of remarketing the property, attorneys' fees, and possibly even consequential damages such as the seller's loss of opportunity to purchase something else. In extremely rare cir- cumstances, the seller can obtain an injunction forcing the defaulting buyer to proceed with the purchase.

• If the seller defaults, the buyer may apply for an injunction to order the seller to proceed with the sale. This unusual remedy is because the law says that real property is so unique that money damages can never compensate one for its loss—only the property itself will suffice. Despite that, buyers may waive this remedy of specific performance and seek dam- ages instead. Under some circumstances they may receive both.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The guidance includes a number of examples of material breaches but does not cover every scenario where FFI might apply.
The appellate court reversed the trial court's decision that granted a motion for permanent injunction holding that the reduction of the draw was a material breach of contract having the effect of releasing the employee from his obligations under the noncompete agreement.
It also recalls that the council decided on November 8 that false statements or omissions in its 12,000-page declaration to UN weapons inspectors ``and failure by Iraq at any time to comply with and co-operate fully in the implementation of that resolution would constitute a further material breach''.
He said: "If Iraq is not co-operating fully and everyone accepts they are not co- operating, why is Iraq not in material breach? I still don't know the answer to that question."
''These are material omissions that, in our view, constitute another material breach,'' Powell said.
Mr Powell said: 'This is a new material breach' on the part of Baghdad, following many violations over the past decade.
NATO headquarters in Brussels BRUSSELS, Feb 1 (KUNA) -- NATO Friday expressed its "strong support" to the findings of the United States that Russia is in material breach of its obligations under the INF (Intermediate-Range Nuclear Forces) Treaty and called upon Russia to urgently return to full and verifiable compliance.
It added, "Likewise, we conclude that the record adequately supports the Court of Chancery's declaration that Fresenius properly terminated the merger under Section 7.01(c)(i) because Akorn's breach of its regulatory representations and warranties gave rise to an MAE and Fresenius had not itself engaged in a prior, material breach of a covenant that would have prevented Fresenius from exercising its immediate termination right under the Merger Agreement." Shares of Akorn are down 34%, or $1.89, to $3.70 following the court's decision.
Sheriff Peebles said Mr Dickson was "not in material breach of any obligation".
What constitutes a material breach of a tenant's obligation is not in any way established in law.
In Moscow, Russian Foreign Minister Igor Ivanov complained that the weapons inspectors were coming under pressure to declare Iraq in material breach of resolution 1441.

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