A breach of contract happens when one party fails to do what they promised under a legally binding agreement, without a lawful excuse. It is one of the most common legal problems in business and everyday life. Here is a plain-English guide to what counts as a breach, the types of term involved, and the remedies, under the law of England and Wales.
What counts as a breach?
A breach occurs when a party, without lawful justification:
- fails to perform an obligation (e.g. doesn't deliver, doesn't pay);
- performs defectively (e.g. poor-quality work or goods); or
- performs late; or
- shows, in advance, that they will not perform (an anticipatory breach).
Not every breach lets the innocent party walk away, that depends on which type of term was broken.
Conditions, warranties and innominate terms
English law classifies contract terms by importance:
- Condition, a major term going to the root of the contract. Breach lets the innocent party terminate (end the contract) and claim damages.
- Warranty, a minor term. Breach gives a right to damages only, not termination.
- Innominate (intermediate) term, a term that could be broken in trivial or serious ways. Here the court looks at the consequences of the breach: if it deprives the innocent party of substantially the whole benefit of the contract, they can terminate; if not, they are limited to damages. (This is the approach from the well-known Hong Kong Fir case.)
So whether you can terminate depends on the term and the seriousness of the breach.
The remedies
1. Damages, the main remedy: a money award to put the innocent party, so far as money can, in the position they would have been in had the contract been performed. Key limits:
- Causation and remoteness, you can only recover losses caused by the breach that were reasonably foreseeable (the rule in Hadley v Baxendale).
- Mitigation, you must take reasonable steps to reduce your loss; you can't recover losses you could reasonably have avoided.
2. Termination, for breach of a condition or a sufficiently serious breach of an innominate term (or a clear repudiation), the innocent party can treat the contract as at an end and claim damages.
3. Specific performance, a court order requiring the defaulting party to do what they promised; discretionary and usually only where damages are inadequate (e.g. sale of land or unique goods).
4. Injunction, an order restraining a breach (e.g. of a negative obligation).
5. Agreed remedies (contracts often contain a liquidated damages clause, which is generally enforceable if it protects a legitimate interest and is not out of all proportion to that interest; a genuine pre-estimate of loss may help but is not the sole test), or limitation clauses (subject to UCTA 1977 / the Consumer Rights Act 2015).
What to do if a breach happens
- Check the contract, which term was broken, and what it says about remedies and termination.
- Don't rush to terminate, wrongful termination is itself a breach; take advice on whether the breach is serious enough.
- Mitigate your loss and keep records of it.
- Consider negotiation/mediation before litigation.
Key takeaways
- A breach is a failure to perform a contractual obligation without lawful excuse (including defective, late or anticipatory performance).
- Your right to terminate depends on the term: condition (yes), warranty (damages only), innominate term (depends on the seriousness of the consequences).
- The main remedy is damages (subject to causation, remoteness and the duty to mitigate); others include termination, specific performance and injunctions.
- Check the contract and take advice before terminating, and try to mitigate your loss.
Sources
- General law of contract in England & Wales (breach; conditions, warranties and innominate terms, Hong Kong Fir Shipping)
- Damages principles: Hadley v Baxendale (remoteness); the duty to mitigate; the rule against penalties
- Remedies of specific performance and injunction; statutory controls on exclusion/limitation clauses (UCTA 1977 / Consumer Rights Act 2015)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.