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Breach of Contract

This article covers meaning & overview of Breach of Contract from HRM perspective

Published by MBA Skool Team in Human Resources Terms Last Updated: March 19, 2023Read time:

What is Breach of Contract?

Breach of contract is said to have occurred when either of the employer or the employee violets the terms and conditions mentioned in the employment agreement.


The breach of contract gives the aggrieved party a legal right to claim compensation from the other party. The aggrieved party may either terminate the contract after filing financial claim or ask the guilty party to show a specific performance in order to compensate the loss.


If contract is broken by employer:

The employee should approach the employer first and try to solve the issue through mutual discussion. If it fails, he should try the mediation channel. Even if this step fails, the employee must resolve the issue through civil courts.

Some examples of breach of contract by employer are:

  1.  The employer is consistently paying salaries late to the employee.
  2.  The employer wrongfully dismisses the employee.


If contract is broken by employee:

The employer should try to resolve the matter through one-on-one discussion with the employee. In case of financial damages, the employer can sue the employee for the compensation.

Some examples of breach of contract by employee are:

  1. Employee moves out to work with the employer’s competitor but your contract refuses it.
  2. Employee doesn’t work for the prescribed minimum hours.

Hence, this concludes the definition of Breach of Contract along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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