Fundamental Breach Law and Legal Definition

Fundamental breach means any breach to a contract that is so fundamental. Any fundamental breach permits a party to terminate the performance of a contract. This also entitles a party to sue for damages.

Following is an example of a United Nations convention (convention on Contracts for the International Sale of Goods) defining fundamental breach:

Article 25 defines fundamental breach as A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.