What does a breach of contract refer to in a binding agreement?

A breach of contract occurs when one or more parties do not honor the commitments outlined in a binding agreement. This means that at least one party fails to fulfill their obligations as specified in the contract, which can take various forms, such as not delivering goods, failing to provide a service, or not making payments on time.

Understanding breaches is crucial in legal and business contexts because they can lead to disputes and may require remedies such as damages or specific performance to resolve the issues. The emphasis on non-performance highlights the importance of the contractual obligations that both parties initially agreed upon. In contrast, fulfilling obligations, modifying terms, or terminating the contract does not constitute a breach; rather, those actions signify compliance or mutual agreement to change the contract that does not imply any failure to perform.