A breach of contract generally occurs when one party refuses or fails to perform one or more of the obligations it has undertaken in pursuance of that contract. A breach of contract may take one of the three forms;

  • The party in default may either expressly repudiate liability under the contract,
  • The party in default may do some act which renders further performance of the contract impossible,
  • The party in default simply fail to perform when performance is due.

For example, in the context of a time charter party, the ship owner may;

  • Alternatively repudiate its obligation to provide the chartered vessel,
  •  Render further performance of the charter party impossible by selling the vessel to a third party,
  • Withdraw the vessel during the currency of the charter.

In the first two cases the breach may occur before either party is entitled to demand performance from the other.

The effect of any breach is to give rise to an automatic right of action for damages and in certain cases it may entitle the innocent party to treat himself as discharged from all further obligations under the contract.

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