What term denotes termination of a contract when one party fails to meet obligations, allowing the other to terminate?

• A. Destruction of property
• B. Rejection
• C. Breach
• D. Acceptance

Answer: (C)

When one party fails to perform what was promised, the situation is described as a breach. A breach occurs when obligations aren’t met, and if the breach is material—meaning it goes to the heart of the contract—the non-breaching party can treat the contract as terminated and walk away. This concept underpins why termination is possible: the failure to perform defeats the contract’s purpose and the expected exchange.

Rejection and acceptance are about agreeing to terms and forming the contract, not about ending it due to nonperformance, and destruction of property isn’t a contract-termination term.