Canadian Hospitality Law Practice Exam 2026 – Complete Prep Resource

A contract can be breached in several ways, with repudiation, failure to perform, and sabotage being key methods of breach.

Repudiation occurs when one party indicates, either through their words or actions, an unwillingness to fulfill their obligations under the contract. This can include explicit statements of non-performance or conduct that strongly suggests that the terms of the contract will not be followed.

Failure to perform refers to a situation where one party simply does not complete their obligations as outlined in the contract, whether it is due to inability, negligence, or intentional withholding of performance. This type of breach infringes directly upon the rights of the other party, as they are not receiving the benefits that were contractually promised.

Sabotage involves an intentional act that undermines or prevents the fulfillment of the contract, which can be seen as a more egregious form of breach. This could include actions taken by one party that deliberately impair the other party's ability to perform their contractual duties.

The correct answer highlights significant and clear ways in which a contractual obligation can fail, while the other options listed do not adequately capture the complexity and gravity of a contract breach.