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What is a notice of breach of contract?

On Behalf of | Sep 9, 2021 | Contracts |

Honoring the provisions contained in the contract is a legal duty that all parties to such a legal agreement owe each other. Any instance in which a contracted party fails to meet their responsibilities as laid out in the contract may result in either party filing a notice of breach of contract

Such a notice is also commonly referred to as a demand letter. Its purpose is to notify a contractually obligated party of their non-compliance with the legally binding agreement.

Which situations warrant filing a notice of breach of contract?

There are a few different situations that may warrant the filing of a breach of contract notice, including when a contracted party:

  • Fails to perform as was required of them
  • Discovers that the other party won’t be able to meet their obligations
  • Appears to be unwilling or unable to honor their contract

It may be necessary for you to file a notice of breach letter if any of the above-referenced situations exist. 

What details should you include in the notice of breach letter?

The demand letter outlines any existing evidence that shows how the other party failed to perform as per their contractual obligations. It should also highlight any potential steps you recommend for fixing the breach. 

These steps, or remedies, may include:

  • The contracted parties having further discussions aimed at addressing the problem
  • Terminating the contract
  • Securing compensation for damages caused by the breach

The contracted party impacted by the non-compliance can outline their preferred resolution when drafting their demand.

When should notice of breach be given?

Generally, you’d reach out to the non-compliant party when they violated the terms of the contract. You should review the notification clause in your contract, as the notice requirements and steps you must take to rectify conflicts may vary from one contract to the next. 

A notice of breach should be your first resort when a contracted party isn’t meeting its obligations. You put yourself in a position to resolve your disputes without having to pursue time-consuming and costly litigation by doing so. All in all, safeguarding your rights in a contract dispute should be your highest priority if you want to receive a fair resolution.