What is a breach of contract?
A breach of contract is a failure, without a legal excuse, to perform a promise that forms part of a contract. It can mean not performing at all, performing late, delivering something defective or telling the other side ahead of time that you won't perform. Breach is the gateway to contract remedies: once it's shown, the injured party can usually recover damages and sometimes end the contract.
Most contract law in the U.S. is state law. Courts apply common law principles summarized in the Restatement (Second) of Contracts, and sales of goods are governed by Article 2 of the Uniform Commercial Code (UCC), adopted in every state except Louisiana in full. Korean law covers the same ground under the Civil Act's rules on nonperformance (채무불이행).
- Types
- Material, minor, anticipatory
- Main remedy
- Expectation damages
- Limits
- Foreseeability, certainty, mitigation
- Korean term
- 채무불이행 (nonperformance)
Almost every contract dispute starts with one question. Was there a breach, and was it serious enough to let the other side walk away?
Material vs. minor breach
A material breach goes to the heart of the deal and substantially deprives the other party of what it bargained for. It lets the injured party stop performing, end the contract and sue for damages. A minor breach (or partial breach) is a smaller shortfall, such as slightly late delivery, which supports a claim for damages but doesn't excuse the other side's own performance.
Courts weigh factors from Restatement § 241, including how much benefit the injured party lost, whether money can make up for it, and whether the breaching party acted in good faith. For goods, the UCC's perfect tender rule lets a buyer reject a delivery that fails to conform in any respect, softened by the seller's right to cure in many cases.
Anticipatory repudiation
A party doesn't have to wait for the performance date if the other side clearly says it won't perform. This is anticipatory repudiation, recognized in the English case Hochster v. De La Tour (1853), where a courier hired for a European tour was told weeks before the start date that he wasn't needed and could sue right away. Under UCC § 2-610 the injured party may wait a commercially reasonable time or treat the contract as broken and seek remedies.
Types of contract damages
- Expectation damages: the value of the promised performance minus what the injured party saved, putting it where the contract would have.
- Reliance damages: money spent preparing to perform, used when lost profits are too uncertain.
- Restitution: returning the value of a benefit given to the breaching party.
- Consequential damages: indirect losses like lost resale profits, recoverable only if foreseeable.
- Liquidated damages: an amount agreed in the contract, enforceable if it's a reasonable estimate rather than a penalty.
The foreseeability limit comes from Hadley v. Baxendale (1854), in which a mill's owners couldn't recover profits lost while a carrier delayed a broken crankshaft, because the carrier wasn't told the mill would sit idle. Damages must also be proven with reasonable certainty, and the injured party must take reasonable steps to mitigate, for example by buying substitute goods (called "cover" under UCC § 2-712). Punitive damages are generally unavailable for breach alone, though some states allow them when the breach also amounts to fraud or another independent tort. Emotional distress damages are likewise limited to unusual contracts, such as those involving funerals.
- Hochster v. De La Tour (1853)
- Anticipatory repudiation allows an immediate suit
- Hadley v. Baxendale (1854)
- Only foreseeable losses are recoverable
- Jacob & Youngs v. Kent (1921)
- Wrong brand of pipe was a minor breach; damages, not rebuilding
Specific performance and termination
Courts can order a party to actually perform, called specific performance, when money isn't adequate, most often for land, rare art or other unique goods that no amount of money could replace. It's rarely ordered for personal services. In Korea, by contrast, compelled performance is a standard remedy in principle, reflecting the civil law tradition discussed in common law vs. civil law.
Under the Korean Civil Act, a creditor facing delay must usually set a reasonable period and demand performance before cancelling (art. 544), while impossibility or a fixed-date contract allows cancellation without that warning (arts. 545-546). Damages are limited to ordinary losses and to special losses the debtor knew or could have known about (art. 393), a rule close to Hadley v. Baxendale. Korean law, unlike U.S. law, generally requires fault for contract damages. Litigation steps are in civil procedure.
A Korean report on Breach of Contract and Damages in Korean and International Sales Law: Delay, Impossibility, Defective Performance and Anticipatory Breach compares these rules in international trade deals, and a paper on Freedom of Contract and the Limits of Classical Civil Law: Why Social Welfare Law Emerged, a Korean Social Law Overview explains why freedom of contract later needed limits.
| United States | Korea | |
|---|---|---|
| Fault needed? | No (strict liability) | Yes, fault presumed |
| Ending the contract | After material breach | After demand (delay) or at once (impossibility) |
| Indirect losses | If foreseeable (Hadley) | Special losses if knowable (art. 393) |
| Forced performance | Exceptional | Available in principle |
Cash Note
청년문화예술패스 하반기 추가 발급 — 2006·2007년생 최대 20만 원, 11월 30일까지
39 readers so far
Make Korean friends & friends from around the world learning Korean
Chat easily with people from many countries who love Korea.
Beauty UP
대학생 가성비 기초 루틴 — 꼭 필요한 3단계만 남기기
110 readers so far
Psych UP
나의 돈 성향 테스트｜저축 다람쥐? 오늘만 사는 플렉서?
2 people have taken it so far
Criticism and debate
The theory of efficient breach argues that breaking a contract and paying damages can be good if it moves resources to a more valuable use. Critics reply that it ignores the moral force of promises and that expectation damages often undercompensate, especially because winners usually pay their own lawyers under the American rule. Consumers face special problems with fine print, arbitration clauses and limits on liability, issues covered in consumer protection basics.
A good contract plans for breach before anyone breaks it. Clear deadlines, notice rules and damages clauses save more money than any lawsuit.
- What is a breach of contract in simple terms?
- It's when someone doesn't do what a contract requires, such as not paying, delivering late or delivering defective goods, without a valid legal excuse.
- What is the difference between a material and a minor breach?
- A material breach defeats the main purpose of the deal and lets the other side end the contract, while a minor breach only supports a claim for damages.
- What damages can you get for breach of contract?
- Usually expectation damages, plus foreseeable consequential losses, reduced by losses you could have avoided; punitive damages are rarely available.
References and official sources
- Breach of contract, Wex. Cornell LII
- UCC § 2-610 (anticipatory repudiation). Cornell LII
- UCC § 2-712 (cover). Cornell LII
- Expectation damages, Wex. Cornell LII
- 민법. 국가법령정보센터