Breach of Contract

It is necessary to look at the issue of breach of contract, namely where one party does not perform his part of the bargain. In other words, he is in breach of one of the terms with which he should comply. The question therefore arises as to what may the other party do in response to this breach. This is determined by a consideration of the importance of the term which has been breached.

Contractual terms are classified into categories according to their importance in relation to the contract. These are important terms of the contract. They go to the root of the contract. Breach of such a term is said to be fundamental and entitles the innocent party to terminate the contract and claim damages. Less important, minor terms, which do not affect the overall performance of the contract as intended by the parties. Breach of a warranty does not entitle the innocent party to terminate the contract, although he may, of course, claim damages.