What Is a Breach of Covenant?

A breach of covenant is a legal term. It comes into play when a person or company which has entered into a contract refuses to perform a duty or refrain from doing a particular action. This provision extends to a duty under a contract which is implied, as well as ones which are included in a written agreement.

One example of this type of contract violation is a situation where a landlord agrees to rent a house or an apartment to a tenant and the tenant does not comply with the terms of the lease. Failing to pay the rent as agreed would be considered a breach of covenant in this case, since the tenant has promised to pay a certain amount to occupy the premises each month. Another example of a breach in a landlord and tenant matter is if the tenant made substantial changes to the property without the landlord’s permission.

A written agreement of purchase and sale can also form a covenant between the people or corporations who signed it. The seller has agreed to transfer a specific item to the buyer on a set date. If the seller refuses to hand over the item after the purchaser has paid for it as agreed, the seller has committed a breach of covenant. A breach may also be claimed if the item received by the purchaser was not what he or she agreed to buy.

Not all contracts where a covenant applies are written ones. When a contract is signed, there is an assumption that each person or company entered into the agreement in good faith and intends to abide by the terms of the agreement. A person who can show that the other party signed the agreement but had no intention of performing his or her duties under the contract can seek legal recourse from the other party.

If a breach of covenant has occurred, the wronged party can go to court to seek a legal remedy. A judge can order the person found to be in breach of the terms of the contract to perform the duties outlined in the agreement. This type of specific performance is not the only remedy for breach of covenant available to a wronged party. The court can also order that the action which is in breach of contract be stopped by issuing an injunction or direct that the wronged party be compensated by receiving monetary damages.