Definition
Failure to perform when due.
Non-performance on due date.
Etymology & Origin
From Latin 'actualis' (actual, real, active), from 'actus' (a doing, an act) from 'agere' (to do, to drive). 'Actual' denotes that which has in fact occurred, as opposed to that which is merely threatened or anticipated. An actual breach is therefore a breach that has in fact happened — the failure to perform at the time and in the manner required by the contract. The term contrasts with 'anticipatory breach', which occurs before the time for performance.
Full Legal Analysis
Actual Breach: Failure to Perform When Performance Is Due
The simplest and most common form of breach is the actual breach: a failure to perform the contract at the time and in the manner required. Where the date for performance arrives and a party does not perform, or performs defectively, the breach is actual — it has occurred in fact, at the moment performance was due. This is the paradigm case of breach of contract, and it gives rise immediately to the innocent party's remedies.
Breach at Performance and During Performance
Actual breach may occur in two temporal contexts. The first is breach on the date of performance: the time fixed for performance arrives and the party fails to perform at all, or fails to perform in accordance with the contract's terms. The second is breach during the performance of the contract: where the contract is one that extends over time, a party may breach by improper performance during the currency of the contract — supplying defective goods in an instalment contract, suspending work without justification, deviating from the agreed specifications. In either case, the breach is 'actual' in the sense that it has occurred in fact, at or during the time of performance, rather than being merely threatened in advance.
Consequences and Remedies
An actual breach gives the innocent party an immediate right to remedies. Depending on the nature and gravity of the breach, the innocent party may: (a) sue for damages to compensate for the loss caused; (b) where the breach is of a vital term (a 'condition'), treat the contract as discharged and be released from their own remaining obligations; (c) where the breach is of a lesser term (a 'warranty'), sue for damages while remaining bound to perform their own obligations; (d) seek specific performance compelling the breaching party to perform, where damages are inadequate; (e) seek an injunction restraining a breach that would cause irreparable harm. The measure of damages, following the principle in Hadley v. Baxendale, seeks to place the innocent party in the position they would have occupied had the contract been properly performed. The distinction between actual and anticipatory breach matters chiefly for timing: an actual breach accrues at the moment of failure, giving an immediate cause of action without the election that anticipatory breach requires.
“When the day of performance comes and the promise is not kept, the breach is no longer a threat but a fact. The law, recognising the failure, opens at once the door to remedy — damages for the loss, discharge for the burden of a broken bargain, specific performance where money alone will not answer. The innocent party need not wait, need not elect; the wrong has happened, and the response begins.”
