We discuss the breach of contract definition across the United States generally and in particular in Florida. Under the Anglo-American legal system, such as the United States, in order to form a contract, there must be an offer, acceptance and consideration. In civil legal systems such as in Continental Europe, formation of a contract generally requires offer and acceptance; once the party accepts and acceptance becomes effective the contract is concluded and the parties are bound by their promises.
In the United States, all contracts are governed by the common law of contract at state level, and the contracts between merchants for the sales of goods are governed by the Uniform Commercial Code (UCC) Article 2. In addition, the United States has adopted the United Nations Convention on Contracts for the International Sales of Goods (CIGS). As a result, we discuss the breach of contract definition under the Restatement 2nd of Contracts, the UCC Article 2 and the CIGS.
Generally, a breach of contract is a failure to perform by one or more parties, without a legal excuse. The common law Restatement 2nd of Contracts, provides that “when performance of a duty under a contract is due any non-performance is a breach.” In other words, non-performance is not a breach unless performance is due. There are cases in which performance may not be due because an extended period of time has passed, a condition has not been met, the duty has already been discharged or others. In such a case non-performance is justified. When performance is due, however, anything short of full performance is a breach, even if the party who does not fully perform was not at fault and even if the defect in his performance was not substantial. Non-performance of a duty when performance is due is a breach whether the duty is imposed by a promise stated in the agreement or by a term supplied by the court, as in the case of duty of good faith and fair dealing. Non-performance includes defective performance as well as an absence of performance.
UCC Article 2, Section §2-607 does not discuss breach of contract explicitly but discusses the section as follows: “Acceptance of the goods by the buyer precludes rejection of the goods accepted and of made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article [Article 2] for non-conformity.” The section continues on to explain that “the burden is on the buyer to establish any breach with respect to the goods accepted.” Further, this section provides that “where a tender has been accepted (a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and (b) if the claim is one for infringement or the like and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.”
The CIGS Article 25 does not explicitly discuss the breach of contract definition but provides that “a breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.”
As we can see the three breach of contract definitions approach the concept differently, but they overall share the main idea that breach of contract refers to one or more parties that fails to honor a contract.
Malescu Law P.A. – Business Lawyers