Breach of Contract Basics A breach of contract exists when one party fails to fulfill its obligations. There are four types of breach: Actual breach occurs when one party does not perform. If Joe does not paint Fred's house, he is in actual breach of their contract. Anticipatory breach occurs when one party expects the other party to breach and breaches first. Some business practices allow anticipatory breaches for legal reasons. Minor breach occurs when the breaching party has breached the contract in a small way. If Joe said he would start painting at 9:00 a.m. but didn't begin until 9:30 a.m., that would be a minor breach. Material breach means that the breaching party has failed in a way that causes significant harm. A material breach is usually grounds for legal action by the non-breaching party. Contract issues leading to breach of contract are a serious problem for business owners. If you operate a small business, you should have ready access to anexperienced attorneyfor legal advice. The time frame to file a lawsuit is narrow, and the evidence needed to prove your case can be hard to obtain without legal help.