Breach of Contract in Singapore: Your Legal Guide for 2025

In Singapore, contract law is governed by both common law principles and statutes like the Contracts Act, which together provide a strong legal framework for managing agreements. 

Understanding what constitutes a breach, what legal remedies are available to you, and when to seek professional legal help is key to navigating disputes effectively and safeguarding your interests in both personal and business contexts.

What is a Breach of Contract?

A breach of contract refers to any failure by one party to meet its obligations under a legally enforceable agreement. These obligations are typically outlined in detail within the contract, and a breach can occur in various forms. This can be a failure to deliver goods, perform services, or make payment, all of which are considered breaches if they go against what was agreed upon by the parties involved. 

Common examples of breach may include:

• Delivering substandard goods or services.

• Failing to pay on time.

• Not completing work within agreed deadlines.

• Violating confidentiality or non-compete clauses.

Depending on the severity, breaches may be classified as minor, material, anticipatory, or fundamental.

Types of Contract Breaches

Each type of breach may entitle the non-breaching party to different legal remedies. Understanding the type of breach can help determine the appropriate legal response. Each classification reflects the seriousness of the breach and can influence the remedies that are available to the affected party.

Minor Breach of Contract

A partial failure that does not undermine the overall contract. This occurs when the breaching party has still fulfilled most of their obligations, but with slight deviations. Example: delivering goods a day late.

Material Breach of Contract

A serious failure affecting the essence of the contract. This type of breach can have significant consequences because it impacts the core of the agreement. Example: non-delivery of a product.

Anticipatory Breach of Contract

When one party signals they will not fulfil their obligations in future. This may happen through clear communication or conduct that shows an intention not to perform the agreed-upon duties.

Fundamental Breach of Contract

A fundamental breach of contract is one that is so severe that it allows the non-breaching party to terminate the contract entirely. This breach strikes at the heart of the agreement and makes it impossible for the contract to continue meaningfully.

What Should You Do If a Contract Is Breached?

If you’re dealing with a potential breach of contract, here are the key steps you should take to protect your interests and pursue a fair resolution.

1. Review the contract

Understand each party’s responsibilities and breach clauses. Carefully go through the terms and conditions outlined in the contract to confirm what obligations were agreed upon and whether any breach has occurred.

2. Document everything

Keep evidence such as emails, invoices, and contracts. Gathering and organising all relevant documentation will support your claims and may be crucial in negotiations or legal proceedings.

3. Attempt resolution

Consider mediation or direct negotiation. Open communication with the other party might lead to a mutual understanding or compromise that avoids the need for formal legal action.

4. Send a letter of demand

This is a formal notice requiring the other party to remedy the breach. It outlines the issue, what you expect to be done to correct it, and sets a clear deadline for compliance.

5. Seek legal advice

If the breach remains unresolved, consult a lawyer specialising in contract disputes. A legal expert can assess your situation, explain your rights, and guide you through the appropriate legal remedies.

Legal Remedies for Breach of Contract

Victims of contract breaches have several legal remedies under Singapore law. These remedies are designed to address the harm caused and help restore the affected party as closely as possible to the position they were in before the breach occurred:

• Damages: Monetary compensation to cover losses. This is the most common remedy and is intended to compensate the non-breaching party for financial harm suffered due to the breach.

• Specific Performance: A court order requiring the breaching party to fulfil their contractual obligations. This remedy is typically used when monetary compensation is not sufficient, such as in cases involving unique goods or property.

• Injunctions: Court orders to stop a party from doing something, such as sharing confidential info, to prevent ongoing or potential harm that cannot be remedied through compensation alone.

• Rescission: Cancelling the contract and restoring both parties to their original positions. This remedy effectively treats the contract as if it never existed, allowing both parties to walk away from their obligations.

• Restitution: Reimbursing the non-breaching party for expenses or benefits conferred to prevent the breaching party from being unjustly enriched at the expense of the other party.

Common Breach of Contract Scenarios

Breach of contract claims occur across multiple sectors. These breaches can lead to legal action and impact business relationships or individual rights. Some of the most common include:

1. Employment Contracts

Breach occurs when employers or employees fail to honour terms such as notice periods, non-compete clauses, or confidentiality. Disputes often arise around wrongful dismissal or unfair deductions.

2. Commercial Agreements

These breaches involve failure to meet obligations in supply contracts, service agreements, franchise arrangements, or lease terms. Often, disputes stem from ambiguous clauses or payment failures.

3. Construction Contracts

Parties may breach by delivering substandard work, missing project deadlines, or failing to adhere to specifications. These disputes can have major financial implications for developers and contractors.

4. Partnership Agreements

Partnership breaches typically involve one partner acting outside their authority, misappropriation of assets, or breaching fiduciary duties. These cases often call for negotiation or litigation.

5. Consumer Contracts

When businesses don’t deliver promised goods or services or breach return and refund policies, consumers may seek legal remedies. Online transactions are especially prone to disputes.

How to Prevent Breaches in Business Contracts

While legal remedies are helpful in resolving issues after a breach has occurred, prevention is always better. Proactively managing contracts can save time, money, and protect relationships. Here are steps businesses and individuals can take to prevent the likelihood of breaches:

• Draft clear and detailed contracts: Use specific language and define expectations. The more precise the terms, the easier it is to avoid misunderstandings.

• Include dispute resolution clauses: Provide steps for mediation, arbitration, or negotiation.  These clauses set out the process for resolving disagreements before resorting to litigation, which can be costly and time-consuming.

• Ensure contracts are reviewed by a lawyer: A legal review can flag loopholes or unclear terms so that the lawyers can identify potential legal risks and ensure the contract is enforceable under Singapore law.

• Track deliverables and deadlines actively: Use software to monitor progress. Contract management tools can help track milestones, monitor performance, and send reminders about upcoming obligations.

• Maintain written communication: Store emails, meeting minutes, and change orders. Keeping a written record of all contract-related communications ensures transparency and provides evidence in case of future disputes. 

Frequently Asked Questions About Breach of Contract

1. What qualifies as a breach of contract?

Any failure to perform duties as stated in the contract—be it delay, non-delivery, or deviation—qualifies as a breach.

2. Can I sue if a verbal contract was breached?

Yes, verbal contracts can be enforceable in Singapore, but they are harder to prove. Documentation is crucial.

3. How long do I have to file a claim?

Under Singapore’s Limitation Act, you typically have 6 years from the date of breach to initiate a claim.

4. What if I partially fulfilled the contract?

Partial fulfilment may still constitute a breach depending on the impact. Legal advice can clarify liability.

5. Can a contract be terminated without penalty?

Only if the contract contains a termination clause allowing for penalty-free cancellation under specific conditions.

Final Thoughts: Protecting Your Rights in Business Deals

Breach of contract cases are common in Singapore, especially in business, employment, and commercial settings. Knowing your rights and acting quickly can make the difference between a successful recovery and a prolonged dispute.

If you’re facing a contract dispute or need guidance on legal remedies, DL Law Corporation offers strategic, affordable, and personalised support. Our team of corporate lawyers in Singapore brings deep experience in resolving complex cases, from breach analysis to courtroom litigation.

Contact DL Law Corporation to protect your legal interests and resolve contract disputes effectively.