Legal Definitions - passive breach of contract

A passive breach of contract occurs when one party to an agreement fails to fulfill their contractual obligations through inaction, omission, or delay, rather than through an active, deliberate act that violates the contract. It is essentially a failure to do something that was required by the contract, or a failure to prevent something that should have been prevented, often due to neglect, oversight, or a simple failure to perform.

Here are some examples illustrating a passive breach of contract:

• Example 1: Maintenance Service Agreement

  A homeowner hires a pool maintenance company under a contract that requires weekly cleaning and chemical balancing. For three consecutive weeks, the company fails to send a technician to service the pool, leading to algae growth and imbalanced water chemistry.

  Explanation: The pool maintenance company's *inaction* – their failure to perform the weekly service as stipulated in the contract – constitutes a passive breach. They did not actively damage the pool; rather, they failed to perform their agreed-upon duties, leading to a negative outcome.

• Example 2: Software Development Deadline

  A small business contracts with a software development firm to create a custom inventory management system, with a firm delivery deadline of six months. Despite regular check-ins, the firm consistently falls behind schedule due to internal resource allocation issues and a lack of progress, ultimately failing to deliver the completed software by the agreed-upon date.

  Explanation: The software development firm's *failure to deliver* the completed system by the contractual deadline, stemming from their lack of sufficient action and progress, is a passive breach. They didn't actively sabotage the project; they simply failed to meet their obligation to complete and deliver the work on time.

• Example 3: Commercial Lease Agreement

  A tenant operating a retail store signs a commercial lease that includes a clause requiring them to maintain the storefront's exterior, including regular window cleaning. Over several months, the tenant neglects to clean the windows, allowing them to become visibly dirty and detracting from the building's appearance.

  Explanation: The tenant's *omission* – their failure to perform the required window cleaning as per the lease agreement – is a passive breach. They did not actively damage the property, but their inaction violated a specific maintenance obligation outlined in their contract.