What is defined as a breach of contract?

A breach of contract occurs when one party fails to perform according to the terms set out in the contract. This failure can be in the form of not fulfilling obligations, not meeting deadlines, or not delivering the promised quality or quantity of goods or services. The essence of a contract is that it creates binding obligations for both parties, and when one party does not adhere to their commitments, it constitutes a breach.

This definition emphasizes the importance of compliance with the agreed-upon terms, which is the foundation of contract law. The other options do not capture the essence of a breach. They refer to issues related to the negotiation process, the formation of the contract itself, or mutual termination, which do not involve the failure to adhere to the obligations outlined within an existing contract. Thus, the correct understanding of a breach of contract is accurately captured by the option regarding failure to perform according to the contract's terms.