Fundamental and ordinary breach, enforcement, cancellation and damages, and the first steps to preserve rights.
What is a breach of contract?
The Contracts Law (Remedies for Breach of Contract), Tashla-1970, defines a breach as an act or omission that is contrary to the contract. A breach can take many forms: non-payment, non-supply, delay, partial or defective supply, and breach of ancillary provisions. The law distinguishes between an "ordinary" breach and a fundamental breach: a breach such that a reasonable person would not have entered into the contract had they foreseen it, or that the parties defined as such in the contract, subject to the limitations of the law on sweeping clauses. The distinction has enormous practical significance: a fundamental breach may confer a right of cancellation without an extension, but notice of cancellation is required within a reasonable time and in accordance with the agreement and the law.
The remedies available to the injured party
A party injured by a breach is entitled to choose between remedies, and to combine remedies that are consistent with one another without double recovery: specific performance, requiring the breaching party to perform the contract in practice; cancellation of the contract and mutual restitution of what was received; and damages for the harm caused, alone or alongside the other remedies. The choice between remedies is a strategic decision: unlawful cancellation of a contract turns the cancelling party into the breaching party, and this is one of the common pitfalls in commercial disputes.
Practical steps when you are facing a party in breach of contract
Documenting the breach in real time; sending a written notice demanding performance within a reasonable time, a condition for some remedies; avoiding rash declarations of cancellation; and considering urgent relief, a temporary attachment, and an injunction where there is concern about dissipation of assets. Early legal action significantly increases the chances of collection at the end of the process.
Legal representation in contract disputes
Israel Arama represents plaintiffs and defendants in commercial and private contract disputes, from negotiation through judgment and collection. Contact us for an initial consultation without obligation before taking an irreversible step.
What is a breach of contract?
The Contracts Law (Remedies for Breach of Contract), Tashla-1970, defines a breach as an act or omission that is contrary to the contract. A breach can take many forms: non-payment, non-supply, delay, partial or defective supply, and breach of ancillary provisions. The law distinguishes between an "ordinary" breach and a fundamental breach: a breach such that a reasonable person would not have entered into the contract had they foreseen it, or that the parties defined as such in the contract, subject to the limitations of the law on sweeping clauses. The distinction has enormous practical significance: a fundamental breach may confer a right of cancellation without an extension, but notice of cancellation is required within a reasonable time and in accordance with the agreement and the law.
The remedies available to the injured party — what is important to know?
A party injured by a breach is entitled to choose between remedies, and to combine remedies that are consistent with one another without double recovery: specific performance, requiring the breaching party to perform the contract in practice; cancellation of the contract and mutual restitution of what was received; and damages for the harm caused, alone or alongside the other remedies. The choice between remedies is a strategic decision: unlawful cancellation of a contract turns the cancelling party into the breaching party, and this is one of the common pitfalls in commercial disputes.
Practical steps when you are facing a party in breach of contract — what is important to know?
Documenting the breach in real time; sending a written notice demanding performance within a reasonable time, a condition for some remedies; avoiding rash declarations of cancellation; and considering urgent relief, a temporary attachment, and an injunction where there is concern about dissipation of assets. Early legal action significantly increases the chances of collection at the end of the process.
This information is for initial orientation about the service and contact process. It is not individual legal advice.
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