6.5 Breach: Types and Effects

• Library: Contract Law in Virginia (Virginia CLE) (2019 Ed.)

6.5 BREACH: TYPES AND EFFECTS

6.501 Overview. Any failure to perform a contractual duty constitutes a breach. ⁸⁰ Unless otherwise agreed between the parties, the non-breaching

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party may sue to enforce the contract if the breach is material. A material breach is a failure to do something that is so fundamental to the contract that failure to perform the obligation defeats an essential purpose of the contract. ⁸¹

Two of the most common breaches are (i) actions taken by one party that make performance by the other party impossible and (ii) failure of performance.

6.502 Making Performance Impossible. A party to a contract is under a duty not to prevent performance by the other party. ⁸² If a party does prevent substantial performance, that party will be unable to enforce the contract and may be liable for damages to the nonbreaching party. ⁸³

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Generally, a party prevented from performing a contract is at liberty to treat the contract as broken, abandon the contract, and recover damages for breach. ⁸⁴ But there are potentially severe consequences for incorrectly declaring the contract breached and abandoning it: the party doing so would then itself be in breach. Accordingly, the practitioner should ensure that the client has explained fully all circumstances constituting the prevention of performance and that these circumstances are very well documented. Making a record through correspondence with the other party may be helpful.

6.503 Failure of Performance. Virginia law recognizes that failure to render the performance promised is a breach, but only if the time fixed for performance has expired and all conditions precedent have been satisfied. In Sligo Parkway Apartments v. Landscape Engineering Co., ⁸⁵ the plaintiff sued a landscape company for damages for breaching its contract to plant trees and shrubs around the plaintiff's apartment buildings. Under the contract, the defendant agreed to replace any plantings that did not survive one year. The defendant's subsequent failure to replace the shrubs that died within the year constituted a breach of contract, and the plaintiff was not required to pay the defendant the balance due under the contract. While the defendant's refusal to perform was a breach of contract because "the time fixed for performance had expired," the plaintiff's refusal to perform—namely, to pay the defendant—was not a breach because the plaintiff did not yet have a legal duty to pay.

The party who commits the first material breach of a contract is not entitled to enforce it or to bring an action against the other party based upon the other party's subsequent failure to perform. ⁸⁶ But if the contract is divisible

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or severable, a breaching party may nevertheless recover for part performance if the part performance preceded the breach. ⁸⁷

A contract is divisible or severable if it has two or more parts not necessarily dependent upon or intended to be dependent upon each other, so that it is capable of division and apportionment. ⁸⁸ Generally, if a contract is divisible, each breach may be sued upon separately. ⁸⁹ The most common example of a divisible contract is an installment contract. Generally, when a party breaches an installment contract, the nonbreaching party may sue only for those installments that are past due. However, if the installment...