A breach of contract occurs when a party fails to perform one or more obligations under a valid agreement, potentially giving rise to legal remedies such as damages or termination.
A breach arises whenever a party does not adhere to the contractual terms, whether through non‑performance, defective performance, delay, or refusal to act. Remedies aim to place the injured party in the position they would have enjoyed if the contract had been properly fulfilled.
Minor breach (partial): A failure that does not prevent completion of the contract but may still attract compensation.
Material breach: A significant failure that substantially deprives the innocent party of the contract’s benefits.
Repudiatory breach: A serious breach going to the root of the contract, entitling the injured party to terminate.
Anticipatory breach: Occurs when one party clearly indicates they will not perform their obligations before the performance date.
To establish a breach, the innocent party must show:
Existence of a valid contract.
That they performed or were ready to perform.
That the other party failed to perform.
That they suffered loss as a result.
Damages: Monetary compensation to restore the injured party to their expected position. Includes nominal, compensatory, consequential, reliance, and sometimes liquidated damages.
Termination: In cases of repudiatory or anticipated repudiatory breach, the innocent party may terminate the contract and seek damages.
Specific performance: Court‑ordered fulfilment of contractual obligations, typically used where damages are inadequate.
Termination rights arise when:
A condition is breached,
A breach is repudiatory,
Or there is anticipatory breach.
The innocent party may elect to terminate or affirm the contract. Care must be taken to communicate termination clearly; otherwise, continuation of the contract may waive termination rights.
Damages are limited to losses that were foreseeable at the time the contract was formed, including special losses of which the breaching party had notice.
No damages for distress or anxiety: Damages for breach generally exclude compensation for personal feelings like vexation or disappointment.
Tort vs Contract: Breach of contract is distinct from tort; liability arises from broken agreements and not general duties of care.
Mr Addis was wrongfully and humiliatingly dismissed during his notice period. The House of Lords held that damages could not include injured feelings or reputational harm caused by the manner of dismissal, reducing recovery to salary and commission losses arising from the breach.
A fishing vessel sank after negligent security checks by Securicor. The House of Lords held that Securicor’s limitation clause effectively capped liability at £1,000, confirming that limitation clauses are construed less strictly than total exclusion clauses and should reflect commercial risk allocation.
Anglia Television abandoned a film after actor Robert Reed repudiated his contract. The Court of Appeal held that the company could recover its wasted expenditure, including costs incurred before the contract, where those losses were reasonably foreseeable as likely to be wasted by the breach.
Lithuanian chicken catchers brought claims against their employer company and its directors for systematic exploitation including underpayment below agricultural minimum wage, unlawful deductions for employment fees and accommodation, and failure to pay holiday pay. The court granted summary judgment for claimants and held directors personally liable for inducing breaches of contract.
Barclays incurred nearly £4 million after Fairclough’s defective asbestos work. The Court of Appeal held that contributory negligence could not reduce damages for breach of a strict contractual obligation, so Barclays was entitled to recover the full agreed loss.
A contractor installed a central heating system for £560 but the system emitted fumes into living rooms and provided inadequate heat (up to 30% deficient in some rooms). The Court of Appeal held that defects costing £174 to repair meant there was no substantial performance of the lump-sum contract, so the contractor could not recover payment.
Buyers failed to give the contractually required 15 consecutive days' notice before shipment of soyabean meal. The House of Lords held this time stipulation was a condition, breach of which entitled sellers to rescind regardless of actual consequences. The case clarified the distinction between conditions and innominate terms in mercantile contracts.
Mr Burnell invested £250,000 in Trans-Tag Ltd, expecting shares in return under an agreement with Mr Aird. When shares were not issued, he sought repayment. The company counterclaimed for breach of directors' duties after Mr Burnell acquired the company's licensor. The court allowed partial recovery for both parties.
A shipowner breached a charter party by deviating, causing nine days' delay in delivering sugar to Basrah. The sugar market price fell during the delay. The House of Lords held the charterers could recover damages for loss of market as such loss was not unlikely to result from the breach and was within the parties' contemplation.
Surrey County Council and Mole Valley District Council sold land to Bredero Homes subject to covenants requiring development in accordance with planning permission for 72 houses. Bredero obtained new permission and built 77 houses, making additional profit. The councils sought damages for breach of covenant but, having suffered no financial loss, were awarded only nominal damages.
Mr Farley employed a surveyor to investigate aircraft noise affecting a property before purchase. The surveyor negligently failed to discover the property was near an aircraft stacking area. Despite no diminution in property value, Mr Farley recovered £10,000 damages for the discomfort and loss of enjoyment caused by the noise.
The plaintiffs, millers in Gloucester, sent a broken crankshaft via the defendants' carrier service to manufacturers in Greenwich for a replacement. The defendants delayed delivery, causing the mill to remain stopped longer than necessary. The court established the foundational rule for remoteness of damages in contract law.
Mrs Heywood instructed solicitors to obtain an injunction against a man molesting her. The solicitors negligently failed to enforce the injunction when it was breached, leaving her unprotected. She recovered the fees paid plus damages for mental distress caused by the continued molestation resulting from their breach of contract.
An interior decorator contracted to decorate and furnish a flat for £750. The work was completed but with minor defects costing £55 to remedy. The defendant refused to pay the balance, arguing the contract was entire and not fully performed. The Court held substantial performance entitled the plaintiff to the contract price less the cost of remedying defects.
Charterers wrongfully terminated a time charter due to delays caused by an incompetent engine-room crew rendering the vessel unseaworthy. The Court of Appeal held that the seaworthiness obligation was not a condition entitling automatic termination; breach must frustrate the contract's commercial purpose. This case established the doctrine of innominate terms.
Mr Jackson booked a family holiday to Ceylon through Horizon Holidays which fell far short of what was promised. The hotel was substandard with mildewed rooms, dirty facilities, and poor food. The Court of Appeal upheld damages of £1,100, establishing that a contracting party can recover damages for loss suffered by third party beneficiaries of the contract.
Mr Jarvis, a solicitor, booked a Swiss skiing holiday based on a brochure promising house parties, entertainment, and ski facilities. The holiday fell far short of these promises. The Court of Appeal held that damages for breach of a holiday contract can include compensation for disappointment, distress and loss of enjoyment, not just financial loss.
Schuler, a German machine tool manufacturer, granted Wickman sole selling rights under a distributorship agreement requiring weekly visits to six motor manufacturers. When Wickman failed to make all required visits, Schuler purported to terminate the agreement. The House of Lords held that the term 'condition' did not automatically entitle Schuler to rescind for any breach.
Planche, a dramatist, was engaged to write an article on costume for a juvenile publication. When defendants discontinued the publication before completion, Planche sued for work already done. The court held he could recover on a quantum meruit for partial performance rendered useless by the defendants' breach.
Trade union officials threatened B.O.A.C. with strike action in breach of contract unless the employer dismissed a non-union employee. The House of Lords held this constituted the tort of intimidation, recognising that threats to breach contracts could form the basis of this tort, and that the Trade Disputes Act 1906 provided no immunity.
A property sale contract was purportedly made with a company that had not yet been incorporated. The claimant sought to hold the defendants personally liable under Section 36C of the Companies Act 1985. The defendants argued the contract contained an 'agreement to the contrary' excluding the statutory effect. The court dismissed the summary judgment application, holding no contrary agreement existed.
Waterlow negligently printed unauthorised Portuguese banknotes after being deceived by a fraudster. The House of Lords held that the Bank of Portugal reasonably withdrew the entire issue and could recover the face-value loss caused by the breach, applying a pragmatic approach to mitigation.
October 4, 2026
National Case Law Archive
October 4, 2026
National Case Law Archive
October 4, 2026
National Case Law Archive