If a party to a contract fails to perform or signals it will not perform, without just cause, this is called?

Study for the ACFE Accounting Terms Test with interactive quizzes. Prepare with multiple choice questions, each question accompanied by explanations and hints. Ensure your success with our study materials!

Multiple Choice

If a party to a contract fails to perform or signals it will not perform, without just cause, this is called?

Explanation:
Failing to perform a contractual obligation, or signaling that you won’t perform, without a valid excuse, is a breach of contract. This describes not meeting what the agreement required, which gives the other party remedies like damages or termination, depending on the breach and the contract’s terms. The phrase “without just cause” matters because it excludes situations where performance is legally excused (such as impossibility or mutual agreement). While related, other terms aren’t as precise: default is more commonly used in lending contexts, nonperformance merely describes the act of not performing, and suspension implies a temporary halt rather than a complete failure to perform.

Failing to perform a contractual obligation, or signaling that you won’t perform, without a valid excuse, is a breach of contract. This describes not meeting what the agreement required, which gives the other party remedies like damages or termination, depending on the breach and the contract’s terms. The phrase “without just cause” matters because it excludes situations where performance is legally excused (such as impossibility or mutual agreement). While related, other terms aren’t as precise: default is more commonly used in lending contexts, nonperformance merely describes the act of not performing, and suspension implies a temporary halt rather than a complete failure to perform.

Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy