A breach occurs when a party fails to perform a contractual obligation. A minor breach lets the innocent party claim damages but does not end the contract; a fundamental (material) breach, one that deprives the innocent party of substantially the whole benefit, allows them to terminate and sue.
The usual remedy is damages: money intended to put the innocent party in the position they would have occupied had the contract been performed (expectation measure). The plaintiff has a duty to mitigate: to take reasonable steps to reduce the loss. Losses that are too remote are not recoverable.
Specific performance (a court order to actually perform) is an exceptional remedy, granted only when damages are inadequate. Classically this applies to land, which is treated as unique; courts rarely order it for ordinary construction or services.
A contract is discharged (ended) several ways:
- Performance, both sides do what they promised (the normal ending).
- Agreement, the parties mutually release each other or substitute a new deal.
- Frustration, an unforeseen event makes performance impossible or radically different, through no fault of either party.
- Breach, a fundamental breach accepted by the innocent party.
Liquidated-damages clauses (a pre-agreed sum for breach) are enforceable if they are a genuine pre-estimate of loss, but unenforceable as a penalty if designed merely to punish.