Breach of contract

Legal Environment for Business in Nepal

5 December 2016

Saroj Shrestha 1

‘To breach means’ to break a rule or an agreement’. ‘Breach of contract’ means ‘failing to do something as accordance to the contract’

Breach of Contract means non performance of contract impliedly or expressly at the time of performance or even before that: which is one of the modes of termination of contract. If a contract is broken by one party the other party becomes aggrieved.

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Section 82 (1) of Contract Act, 2056 contains that, “the contact is deemed to have been breached when : (i) any party to a contract does not meet liability under the contract, or gives a notice to the other party that he/she will not perform the work to be performed under the contract, or in case his/her action or conduct shows that he/she is incapable of performing the work under the contract, he shall be deemed to have breached the contract.

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A breach of Contract:

May be expressed or implied May be caused by any party to a contract, May be caused or anticipatory, by nature, May be either against to terms of contract

or law of contract May cause to terminate the contract May be either by intention or incapacity of

the parties.

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1. Actual breach: It is known as a fundamental breach. When a party to a contract does not perform his liability under a contract at the time when it is due, it is an actual breach of the contract. (Sec. 83 (1) of CA, 2056)

2. Anticipatory breach: When a party to a contract has refused to perform the contract before the due date, it is an anticipatory breach which may cause the Termination of the Contract. Sometimes, any party’s conduct/action shows his incapacity to perform the contract.

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The remedies which are enforced by court of law are as follows”

Damages Specific Performance Injunction

(Sec. 82 to 87 of Contract Act, 2056)

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7Saroj Shrestha

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