Breaking a contract is called breach of contract. A breach of contract happens when one person does not do what she or he promised to do in the contract. The other person can then choose to end the contract. For example, a seller agrees with a buyer that the seller will deliver goods on a certain day. On that day the goods don’t arrive. The delay was not the buyer’s fault. This means that the seller ‘breached the contract’.

There is also a breach of a contract if a person says or does something which makes it clear that they will not carry out their part of the contract. For example, a person promises to sell something to you and then sells it to another person.

There is also a breach if a part of the contract takes place, but something else in the contract is not carried out. For example, a customer orders certain goods and when they arrive it is clear that the goods are of a poor quality. The seller broke the contract because he or she sent poor quality goods instead of the good quality ones agreed on. (See: Problem 2: Breaking a promise)