A contract is formed when two parties mutually agree to enter into an exchange. A contract can be written or, under certain circumstances, it may be an oral agreement. Parties to a contract generally must perform as specified in the agreement unless all parties agree to change the terms of the contract or unless the actions of one party deviate from the agreed-upon terms and are subsequently accepted by the other party, notwithstanding the changes. If one party fails entirely to perform under the terms of the agreement, or prevents the other from completing its obligations under the agreement, a breach occurs and creates a claim for violation of the contract and damages payable to the party in compliance. The non-breaching party is also excused from its obligations under the contract after a breach.
Ordinarily the remedy for breach of contract is money damages. However, breach of some contracts may justify an action to enforce compliance. Under such circumstances, a judicial order can be sought to ensure that the actions under the contract are specifically performed. Dissatisfaction with the performance on a contract or partial performance does not automatically constitute a breach, but may give rise to a partial award for damages to compensate for the defects in performance where one party does not get the full benefit of the bargain.