It’s a scenario many of us in Singapore have nightmares about. You’ve signed a contract, trusting the other party to hold up their end of the deal, only for them to fall short.
Whether it’s a business agreement gone wrong or a service that wasn’t delivered as promised, a breach of contract can leave you feeling frustrated and helpless.
But don’t worry, you have options. Understanding the different types of breach of contract is the first step to protecting your rights.
1. Actual Breach
This is the most common type of breach and occurs when a party fails to perform its obligations by the stipulated deadline. An actual breach can be further divided into:
- Non-Performance: This occurs when a party fails to fulfil their contractual obligations. For example, a supplier completely fails to deliver goods after receiving payment.
- Defective Performance: This occurs when a party has performed its obligations, but the performance is not up to the standard agreed upon in the contract. For example, a renovation contractor uses materials of a lower quality than what was specified in the agreement.
- Late Performance: This is when a party performs its obligations, but after the agreed-upon date or time.
2. Anticipatory Breach (or Repudiatory Breach)
This type of breach occurs before the date of performance is due. It happens when one party, through its words or actions, clearly demonstrates an intention not to fulfil its contractual obligations.
For example, a company hired to cater an event on a specific date informs you a month in advance that they will not be able to provide the service.
In such a case, the innocent party does not have to wait for the actual breach to occur and can take legal action immediately.
Severity of the Breach
Beyond the timing, Singapore law also classifies breaches based on their severity, which determines the remedies available to the innocent party. The landmark Court of Appeal case of RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] SGCA 39 established the main situations where a breach is considered serious enough (or repudiatory) to allow the innocent party to terminate the contract:
- Breach of a Condition: A condition is a term that is fundamental to the contract. If a condition is breached, the innocent party has the right to terminate the contract and claim damages, regardless of the consequences of the breach.
- Breach Resulting in Serious Consequences: Even if the breached term is not a fundamental condition, the innocent party can terminate the contract if the consequences of the breach are so severe that they deprive the innocent party of substantially the whole benefit of the contract.
Breach of Contract Examples in Everyday Life
Sometimes, the best way to understand legal concepts is to see how they apply to situations we can all relate to. Contract breaches are not just for big corporations; they happen in everyday transactions. Here are a few common breaches of contract examples.
1. The Renovation Project Goes Wrong
Imagine you have finally collected the keys to your new BTO flat and hired a renovation contractor. The contract you both signed clearly states that they will use a specific brand of premium vinyl flooring and complete all work by 1st August. However, the contractor finishes the job two months late.
To make matters worse, you discover they have used a cheaper laminate flooring to cut costs. This is a classic case involving two types of breach: late performance for missing the deadline, and defective performance for not using the materials agreed upon in the contract.
2. The Freelancer Who Doesn’t Get Paid
Consider a freelance writer whom a local marketing agency engages to produce a series of articles. They have a simple agreement outlining the work and a payment schedule. The writer delivers all the articles by the deadline, and the agency publishes them. However, the final invoice is ignored, and the agency stops responding to emails.
This is a straightforward example of non-performance. The agency has failed to fulfil its primary obligation: to pay for the services it received.
3. The Suddenly Cancelled Event Booking
Let’s say you are planning a 50th birthday party for your parent and book a private room at a popular restaurant six months in advance, paying a deposit. Your agreement with the restaurant is for a specific date. Three months before the party, the restaurant calls to inform you that they have decided to close for a private corporate event on that day and are cancelling your booking.
This is an anticipatory breach. The restaurant has made it clear before the performance date that they will not honour the agreement. You do not have to wait until the party date to act; you can treat the contract as breached immediately.
Conclusion About The Types Of Breach Of Contract
Dealing with a breach of contract can be a stressful experience, but you don’t have to go through it alone. Knowing the different types of breach of contract empowers you to take the right steps to protect your interests.
If you need guidance on a contract dispute or any other legal matter, our team at Tembusu Law, which includes some of the best corporate lawyers and criminal lawyers in Singapore, is here to help.
Contact us today for a free consultation and to see how we can assist you.
Frequently Asked Questions About The Types Of Breach Of Contract
Can I Sue For A Verbal Agreement That Has Been Breached?
Yes, you can. Verbal contracts are recognised and can be legally binding in Singapore. However, the main challenge is proving the terms of the agreement without a written document. It is always best to have contracts in writing.
What Is The Time Limit For Filing A Claim For Breach Of Contract?
In Singapore, you generally have six years from the date of the breach to file a claim in Court. This is set out in the Limitation Act.
What Kind Of Compensation Can I Get For A Breach Of Contract?
The most common remedy is damages, which is a monetary compensation for your financial losses. In some cases, the Court may order specific performance, which forces the other party to complete their end of the contract, or an injunction to stop them from doing something.
Do I Have To Go To Court To Settle A Breach Of Contract Dispute?
Not necessarily. You can try to resolve the dispute through negotiation, mediation, or arbitration. These are often quicker and less costly alternatives to going to Court.
What Should I Do If I Think The Other Party Is Going To Breach The Contract?
This is known as an anticipatory breach. You should seek legal advice immediately. You may be able to end the contract and sue for damages without waiting for the actual breach to occur.
