The breach of contract clause is a key element of any commercial contract. This clause outlines the consequences that will result if one party fails to meet its obligations under the agreement. A breach of contract occurs when one party fails to fulfill its obligations under the contract without a valid reason.
A well-drafted breach of contract clause typically contains the following key elements:
- Notice of Breach: The non-breaching party must provide notice to the breaching party of the breach, including specific details of the breach.
- Cure Period: The clause may include a cure period, which gives the breaching party an opportunity to correct the breach within a specified timeframe.
- Termination: If the breach is not cured within the cure period, the non-breaching party may have the right to terminate the contract.
- Damages: The clause may also specify the damages that the non-breaching party is entitled to receive as a result of the breach, such as compensation for any losses or expenses incurred as a result of the breach.
- Other Remedies: The clause may include other remedies that are available to the non-breaching party, such as injunctive relief or specific performance.
Examples of breach of contract Clauses in Commercial Contracts
The breach of contract clause in an employment contract might include provisions such as:
- If the employee fails to report to work for three consecutive days without prior notice, the employer may terminate the contract.
- If the employee engages in conduct that is detrimental to the employer's business, the employer may terminate the contract.
- If the employee breaches the terms of the non-compete clause, the employer may seek injunctive relief and/or damages.
The breach of contract clause in a sales contract might include provisions such as:
- If the seller fails to deliver the goods within the specified timeframe, the buyer may terminate the contract and seek damages.
- If the goods are not of the quality specified in the contract, the buyer may return the goods and seek damages.
- If the seller breaches the confidentiality clause in the contract, the buyer may seek injunctive relief and/or damages.
How to manage clauses like these effectively?
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