When is a breach not a breach?

By Ian Yule2019-10-15T12:08:00

If a contract is not specific about what constitutes a breach, how bad do things need to get to justify termination?

Some construction projects never make it to completion. Employer and contractor fall out over time and money issues and, after the two sides have hurled accusations at each other, one of them terminates the agreement. Both make claims for their losses suffered.

At that stage, the dispute comes down to whether the party that gave the notice of termination was entitled to do so. That depends on whether the breach of contract being alleged was sufficiently serious. Serious breaches that justify a termination are termed “repudiatory breaches”. Most standard form contracts give examples, though there may be room for debate as to whether the “guilty” party’s conduct falls within the definition.

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