Simple English definitions for legal terms
Read a random definition: all-holders rule
An efficient breach is when someone breaks a contract on purpose because it would cost them less money to pay for the damage than to keep their promise. This is different from accidentally breaking a contract. When this happens, the person who broke the contract usually only has to pay for the actual damage they caused, not extra punishment.
An efficient breach is when someone intentionally breaks a contract because it would cost them less money to pay for the damages than to actually follow through with the agreement. This is different from accidentally breaking a contract.
For example, let's say a company agrees to sell a product to another company for $10,000. However, the company realizes that they can sell the product to someone else for $15,000. They intentionally break the contract with the first company and pay the damages of $10,000 because it is still cheaper than selling the product for $10,000.
The concept of efficient breach is widely accepted in the legal system, which means that when someone intentionally breaks a contract, they are only required to pay for the actual damages caused by the breach, not any additional punishment.