What constitutes a breach of contract?

A breach of contract occurs when one party fails to perform their obligations as outlined in the contract. This nonperformance can manifest in various ways, such as not delivering goods or services, failing to pay on time, or simply not adhering to the agreed-upon terms and conditions. Essentially, when the expectations set forth in the contract are not met, it constitutes a breach, and the aggrieved party may seek remedies such as damages, specific performance, or contract rescission.

Understanding the nuances of contract obligations is critical, as fulfilling those obligations is what binds the parties to their agreements. Other options discussed, such as mutual agreements and fulfilling obligations, refer more to the formation and execution of a contract rather than a breach. Negotiating for better terms, on the other hand, does not apply in scenarios of nonperformance but rather relates to changes in an agreement. Therefore, recognizing a failure to perform according to the terms is fundamental in identifying a breach of contract.