By definition, a breach of contract arises when one party fails to perform its obligations under the contract. In business process outsourcing, the failure of the service provider to perform the in-scope services can have a very dramatic impact upon the enterprise customer’s ongoing operations and its future prospects, depending on the relevant types of risk.
When developing an outsourcing contract, the parties should consider a wide variety of such risks and results. The legal consequences of a breach may vary according to the circumstances and the contract terms. The breach might be small, with no consequences or modest penalties, or it could be large, justifying termination, damages or renegotiation.