Breach of Contract Elements

The contract law or enactment is often considered to be the mother of all commercial laws. The contract is based upon the logic of transaction. A transaction is basically a situation where two persons exchange money or money's worth with each other. Purchase of a burger is a transaction or a stamp collector swapping a stamp with another collector is a transaction. It must be noted that a transaction arises as a result of an agreement between two or more people or parties. Such an agreement which is supported by a lawful consideration, is known as a legally enforceable agreement or a contract. Thus for a transaction to be a legally enforceable contract, it must possess the following characteristics.

1. There must be more than one party to the contract.
2. The consideration (money or money's worth) must be lawful.
3. There must be unbiased consent from both parties.

What is Breach of Contract

When a person enters a contract he legally binds himself into an obligation that he has to fulfill. For example, 'A' a consumer goes to the supermarket owned and operated by 'B' to buy grocery supplies. Here it is the duty of A to pay up the total of bill as a consideration for the goods that he has purchased. Paying the consideration to B is a legal obligation of B and without paying he cannot leave the market. Similarly, B has to provide A with the goods and services, of an unbiased nature, in totality as the consideration against the sum of money that he is taking from A.

Providing the said goods is termed as a legal obligation. Breach of contract is basically an assistance or refusal to perform the said obligations. In common parlance, such a subsistence from performance of obligation is treated as breach, but people don't go to the courts immediately to file a case suit. Based upon the nature of breach, either some solution is worked out or the court steps in.

Breach of Contract Elements

Contract elements include a variety of different features, such as obligation, performance, time constraint, etc. The following is the explanation to the elements of a contract that can be breached by a person.

• Breach of Obligation: As mentioned above, after entering into a contract, all parties are legally bound to an obligation. It means that with the performance of this obligation, the contract cannot be held as performed or discharged. For example, if you get into a taxi, the taxi driver will have to drive you to a location, that you request him to. Against this service, you are required to pay the said fare to the driver. Non-fulfillment of any of the obligations, is a breach of contract.
• Breach of Performance: A performance or specific performance is specification of consideration that has to be performed. The logic of the concept of performance is that the obligation has to be fulfilled in totality. For example if you walk into a diner, and order a burger, then the diner cannot serve you a burger without the base bread. Similarly if the burger costs $5, then you cannot just hand in $4.50. The partial fulfillment of the obligation is also a breach, and is termed as non-performance.
• Breach of Time Constraint: In business organizations, the element of time is of essence. In such a scenario, the time of performance of the obligation is specified along with an additional grace period. Payments, delivery of goods and performance of specified services, come under the rule of timely performance of obligation. In such a situation, if the time specification is not followed, the contract is said to be breached.

It must be noted that in commercial contracts, remedies and compensations for breach are specified. Thus, if any party breaches a contract, there will be no need to file a suit. The provisions of breach take care of any losses.