ABSTRACT
A party’s failure to perform its obligations under a contract is usually referred to as a “breach of” or “default under” the contract. Once a breach or default is demonstrated to a court, the non-breaching party can seek remedies from the court for its injuries. However, it can sometimes be difficult to determine exactly when a party is in breach of a contract, especially in the context of cases involving “minor” and “immaterial” deviations from contractual terms. Therefore, in an attempt to avoid the need to demonstrate to a judge that a breach has taken place, it has become common practice for parties to list which provisions of the contract will be considered by the parties a breach of the contract and automatically lead to a default under the contract if a party fails to comply with any of them. It is also fairly common to include certain events that may not be within the control of the parties in the list of contractual defaults. One such event, for example, might be the loss of a particular permit by a party. Upon the occurrence (and usually continuance) of any of the events listed as defaults in the contract, the affected party can proceed directly to request a remedy from the court rather than be caught in the intermediate step of trying to prove that its counterparty’s non-compliance was substantial enough to constitute a breach of the contract.
