Breach of Contract Notice

What is a breach of contract notice?

A breach of contract notice is a written document that can be sent to formally notify a party that they have broken the terms of a contractual agreement. This breach of contract notice can be used where the contract is governed by the laws of England and Wales.

What is the difference between a letter before claim and a breach of contract notice?

The purpose of a breach of contract notice is to provide formal notice to a party about the alleged breach, and to provide them with the opportunity to remedy (put right) the breach. If the breach remains unremedied, a party may consider terminating the agreement or making a court claim for breach of contract in the Civil Court.

It is necessary to send a letter before claim before a party issues a court claim in the Civil Court, so this step will follow any breach of contract notice.

Is it mandatory to send a breach of contract notice?

Yes, in some circumstances it is mandatory to send a breach of contract notice. Many contracts include a clause that mandates the sending of a breach of contract notice in the event of a breach. Usually, this type of clause will state that the party in breach should be notified of the breach and provided with the opportunity to remedy (put right) the breach, before further steps may be taken (such as termination of the contract).

What are the prerequisites of a breach of contract notice?

Most contracts will specify how a breach of contract may be sent, and may even specify what the breach of contract notice should contain. It is therefore important to check the contract carefully before a breach of contract notice is created.

Who can send a breach of contract notice?

Any party to a contract can send a breach of contract notice. This can include a natural person or a commercial entity (such as a company), provided that they are a party to the agreement.

What should be done once the breach of contract notice is ready?

Once the breach of contract notice has been finalised, it should be signed by the party that is sending it (the sender). It may then be sent to the other party. A contract will usually contain a clause that specifies how and where notices should be sent. The sender should check those provisions carefully and should send the notice via the specified method.

What documents should be attached to a breach of contract notice?

The sender of the breach of contract notice may wish to attach documents which are relevant to the breach. This might include:

• a letter of demand
• a copy of the contract
• receipts
• a copy of any other previous correspondence such as emails and letters
• a copy of any photographic evidence

What types of contracts might require a breach of contract notice?

This breach of contract notice can be used in a variety of different situations. A breach of contract notice will be best suited for commercial agreements such as:

• a commercial services agreement
• a sale of goods agreement
• a supply of goods agreement
• a construction agreement

Different warning processes are used in relation to employment contracts and work contracts – where a disciplinary procedure will be followed before issuing a formal warning letter.

What happens if the party fails to respond or remedy the breach?

If a party fails to respond or fails to remedy the breach, the sender of the notice may have the right to terminate the contract* or make a court claim to the Civil Court for damages (money owed as a result of the breach) and other remedies.

Different termination rights exist, depending upon the nature of the term that is breached and the provisions of the contract. More information can be found about this in our legal guide.

What should be included in a breach of contract notice?

A breach of contract notice should:

• set out the particulars of the breach – what term has been breached and why
• specify the remedy required – how the party in breach should rectify the breach and put things right
• explain what will happen if the breach is not remedied – that the contract will be ended, or that a court claim may be issued.

What laws apply to a breach of contract notice?

This notice will be sent in relation to the general laws of contract. The law applicable to a specific contract will largely depend upon the nature of that contract.

It is useful to note that, in most cases, a court claim for a breach of contract has a time limit of 6 years (section 2 and section 5 of the Limitation Act 1980). This means that any claim should be brought before the expiry of that period

For a contract made by deed, the limitation period is usually 12 years (section 8 of the Limitation Act 1980) – subject to certain exclusions.

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