Legal Definitions - breach of covenant

A breach of covenant occurs when a party fails to fulfill a specific promise or obligation that was formally agreed upon within a contract or other legal document. This promise, known as a covenant, can be an explicit commitment to perform a certain action or an agreement to refrain from a particular act. When one party violates such a promise, they are said to have breached the covenant.

• Example 1: Commercial Lease Agreement

  Imagine a commercial lease agreement between a landlord and a restaurant owner. The lease contains a covenant stating that the tenant (the restaurant owner) will maintain the exterior facade of the building, including regular cleaning and minor repairs, beyond normal wear and tear. If the restaurant owner neglects to clean the facade for several months, allowing grime and graffiti to accumulate despite the landlord's requests, they would be in breach of covenant. Their failure to uphold the promise to maintain the exterior violates a specific term of their lease agreement.

• Example 2: Employment Contract with Non-Solicitation Clause

  Consider an employment contract for a sales manager that includes a covenant prohibiting them from soliciting the company's existing clients for a period of one year after leaving the company. If, six months after resigning, the former sales manager contacts several of their previous company's key clients to offer them services from their new competing business, they would be in breach of covenant. They have violated the promise made in their employment contract not to solicit those clients.

• Example 3: Real Estate Purchase Agreement

  A buyer and seller enter into a real estate purchase agreement for a house. The agreement includes a covenant where the seller promises to have the roof professionally inspected and any necessary repairs completed before the closing date. If the seller fails to arrange the inspection or complete the agreed-upon repairs by the closing date, despite the buyer's reminders, they have committed a breach of covenant. Their failure to perform the promised action regarding the roof violates a specific term of the purchase agreement.