What constitutes a breach of contract?

The correct answer pertains to a failure by one party to fulfill their obligations under the contract, which is the essence of a breach of contract. A breach occurs when one party does not adhere to the agreed-upon terms and conditions, leading to potential legal consequences for that party. This can manifest in several ways, such as not delivering goods, failing to make payments, or not performing services as specified.

In contrast, a mutual agreement to void a contract does not constitute a breach because both parties are in agreement to discharge their contractual obligations without consequences. A modification of the contract terms or a negotiation that results in a revised contract also do not indicate a breach; instead, they reflect voluntary changes made by the parties involved, which can often be done through mutual consent without any default on either side. Thus, only a failure to perform as stipulated in the contract signifies a breach.