Figures: tax year 2026
A breach of contract occurs when a party fails to perform a contractual duty without a legally sufficient excuse. The Uniform Commercial Code (UCC) Sales Article governs goods; common law generally governs services and real estate.
To identify situations involving breach of contract, the analysis compares promised performance with actual or announced conduct, timing, conditions, and any applicable excuse.
- The assessment identifies the claimant and enforceable promise, such as delivery, payment, specified quality, or completion.
- The timing inquiry determines whether performance is presently due, subject to an unsatisfied condition, or threatened before its deadline.
- The claimant establishes its own required performance, readiness to perform, or justification for withholding performance.
- An excuse analysis addresses supplied impossibility or impracticability facts; ordinary increased cost does not automatically discharge a duty.
- An unfulfilled condition differs from an unperformed promise. An unsatisfied financing condition can excuse closing without establishing that either party broke a promise.
Under common law, a material breach substantially deprives the injured party of the expected contractual benefit and can justify suspending dependent performance.
Common mistakes
- Every delay permits termination. Example 1 remains a compensable partial breach; the essential-time term supplies the changed termination right in Example 2.
- Acceptance restarts perfect tender. An accepting buyer must use damages or satisfy revocation conditions rather than simply repeat an initial rejection.
- Thirty days must always pass. A reasonable assurance period can expire sooner, and a definite refusal already supports repudiation remedies.
Bottom line
- Governing law, promised performance, timing, conditions, and excuses determine whether conduct constitutes breach.
- Common-law materiality and sales rejection, cure, installment, and revocation rules determine whether suspension or termination is justified.
- Definite repudiation permits immediate qualifying remedies; reasonable insecurity supports the sales assurance process.
- Expectation damages replace proven loss after causation, foreseeability, certainty, mitigation, and savings adjustments.
Exam shortcut
The analysis first identifies the claimant: buyer, seller, service customer, or performing service provider. The transaction then determines goods law or common law. The controlling trigger may be a missed deadline, essential-time term, definite refusal, uncertainty, initial rejection, or accepted defect. The calculation begins with the applicable subtraction, followed by distinct adjustments for incidentals, consequential losses, savings, and payments already made.
The full lesson (about 9,504 words, 63 min read) adds 15 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- II.B3
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