A breach of agreement occurs when one party fails to perform their obligations under a legally binding contract. The consequences of such a breach can be significant and may expose the defaulting party to various legal and financial liabilities.
The primary remedy for breach of contract is an award of damages. The non-breaching party may claim compensation to place them in the position they would have been in had the agreement been properly performed. The quantum of damages will depend on the nature and extent of the loss suffered.
In certain circumstances, the court may order specific performance, compelling the breaching party to fulfil their contractual obligations. Alternatively, an injunction may be granted to prevent further breaches.
A material breach may also entitle the innocent party to terminate the agreement and seek damages for any resulting loss. However, not all breaches justify termination; the right to terminate generally arises only where the breach goes to the root of the contract.
In addition to legal remedies, a breach can damage business relationships and reputations. Parties are encouraged to seek legal advice and attempt to resolve disputes through negotiation or alternative dispute resolution before commencing litigation.
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