How to Enforce a Contract When the Other Party Breaches It

To enforce a contract, you first give the other party written notice of the breach and a chance to fix it, then negotiate, and if that fails, bring a claim in the forum the contract names, either a court or arbitration. The result is a judgment or award ordering performance or payment, which you then enforce where the other party has assets. Which remedies are available, and how long you have to act, depend on the law governing the contract.

What counts as a breach of contract?

A breach is any failure to perform an obligation as the contract requires: late, defective or no performance. What matters is how serious it is, because that decides whether you may end the contract or only claim compensation.

Fundamental breach. Under the CISG, a breach is fundamental if it substantially deprives the other party of what it was entitled to expect under the contract, unless the result was not foreseeable (CISG, Art. 25). The UNIDROIT Principles use a similar test and add factors such as whether strict compliance was “of essence” or the breach was intentional (Art. 7.3.1). Common-law contracts often say “material breach” for a similar idea; define it in the contract.
Other (non-fundamental) breaches. You can usually claim damages, but not end the whole contract, unless the contract gives a termination right or the other party fails to perform within an extra period you have set.
Anticipatory breach. If it is clear before the due date that the other side will commit a fundamental breach, you may terminate in advance (CISG, Art. 72; UNIDROIT Art. 7.3.3). Under the CISG you must, if time allows, give reasonable notice so the other party can provide adequate assurance.

What should you do first when the other party breaches?

Start with a written notice that identifies the clause breached and what you require, and keep evidence from day one.

Read the contract’s own procedure. Notice requirements, cure periods, escalation steps and the dispute clause often have to be followed before termination or a claim.
Send a formal notice with a deadline. Under Taiwan’s Civil Code, if a party is in default, you may fix a reasonable period for performance and rescind the contract if it still does not perform (Civil Code, Art. 254); rescission does not affect a claim for compensation (Art. 260). The UNIDROIT Principles have a similar “additional period” mechanism (Art. 7.1.5) and a right for the defaulting party to cure in some cases (Art. 7.1.4).
Document everything. The contract, amendments, correspondence, delivery records, invoices and your losses.
Limit your losses. You are expected to take reasonable steps to mitigate; under the CISG the damages can be reduced by the amount that should have been avoided (Art. 77).
Check the time limit (see below) so that negotiations do not run your claim out of time.

What remedies are available for breach of contract?

The main remedies are performance, damages, termination and any sum the contract fixes in advance. Their exact limits depend on the governing law:

Remedy	What it gives you	Rule and limits (examples)
Performance	An order to pay, deliver or do what was promised	Payment can always be required (UNIDROIT Art. 7.2.1; CISG Art. 62). Other performance can be refused if impossible, unreasonably burdensome, obtainable elsewhere or personal (UNIDROIT Art. 7.2.2). Under the CISG a court need not order specific performance unless its own law would (Art. 28).
Damages	Money for loss suffered and gain lost	Full compensation for harm (UNIDROIT Art. 7.4.2), limited to harm that was foreseeable when the contract was made (UNIDROIT Art. 7.4.4; CISG Art. 74). In Taiwan, compensation covers the injury actually suffered and the interests lost (Civil Code Art. 216).
Termination	Release from future performance; return of what was exchanged	For a fundamental non-performance (UNIDROIT Art. 7.3.1), or after an unanswered deadline (Taiwan Civil Code Art. 254).
Agreed sum (liquidated damages or penalty)	The amount fixed in the contract	Due regardless of actual harm, but can be reduced to a reasonable amount if grossly excessive (UNIDROIT Art. 7.4.13). In Taiwan, a court may reduce a disproportionately high penalty (Civil Code Arts. 250, 252). Other legal systems apply their own tests.
Interest	Interest on late payments	See payment terms in a contract.

Negotiation, mediation, arbitration or court: which route?

Follow the dispute clause; if there is none, the choice is between negotiating and going to a court that has jurisdiction.

Route	How it ends	Binding?	Enforceable abroad?
Negotiation	Settlement agreement	Yes, as a contract	Like any contract
Mediation	Settlement agreement, facilitated by a neutral mediator who does not decide	Yes, as a contract once signed	Like any contract
Arbitration	Award by one or more arbitrators	Yes	Widely, under the New York Convention
Court	Judgment	Yes	Depends on treaties and the enforcing country’s law

Can you enforce a judgment or arbitral award in another country?

Yes, but the route depends on whether you hold an arbitral award or a court judgment, and on the country where you need to enforce it.

Arbitral awards. Each of the 172 parties to the 1958 New York Convention must recognise awards as binding and enforce them (Art. III; status). Some parties apply it only to awards made in other Convention states or to commercial disputes (see the reservations on the status page). Refusal is possible only on the limited grounds in Art. V, such as an invalid arbitration agreement, lack of proper notice, or public policy.
Court judgments under an exclusive choice-of-court clause. Recognised among the 39 Contracting Parties to the 2005 Hague Choice of Court Convention, including the European Union, the United Kingdom and Singapore (HCCH status, last updated 27 November 2025).
Other court judgments. The 2019 Hague Judgments Convention entered into force on 1 September 2023 and has 33 Contracting Parties, including the European Union, Ukraine, Uruguay and, since 1 July 2025, the United Kingdom (HCCH status, last updated 13 May 2025). Elsewhere, national law applies.

Taiwan is not among the New York Convention parties. It applies its own rules instead:

A foreign arbitral award, once recognised by a Taiwanese court, has the same effect as a final court judgment (Arbitration Act, Art. 47). The court must refuse recognition if the award is contrary to public order or the dispute is not arbitrable in Taiwan, and may refuse it if the country where the award was made does not recognise Taiwanese awards (Art. 49). The award and arbitration agreement must be authenticated by a Taiwan mission abroad (Art. 48) — the document authentication route.
A final foreign court judgment is recognised unless, among other grounds, the foreign court lacked jurisdiction under Taiwanese law, the result is contrary to public policy, or there is no mutual recognition between that country and Taiwan (Code of Civil Procedure, Art. 402).

Choose the forum when you draft the contract with this in mind: a judgment you cannot enforce where the other party’s assets are is of little use.

How long do you have to bring a claim?

It depends on the governing law and the type of claim, so check early:

Law	General period for contract claims	Source
Taiwan	15 years, unless a shorter period applies; 5 years for periodic payments such as interest and rent; 2 years for some claims, including the price of goods supplied by merchants and manufacturers	Civil Code, Arts. 125–127
England and Wales	6 years from the cause of action for a simple contract; 12 years for a deed	Limitation Act 1980, s. 5 and s. 8
UNIDROIT Principles (where chosen)	3 years from when the claimant knew or ought to have known the facts; 10 years maximum	Art. 10.2

Frequently asked questions

Can I stop performing my side if the other party breaches?

Sometimes, but stopping without a right to do so can make you the party in breach. Check the contract and the governing law: the UNIDROIT Principles, for example, allow a party that reasonably believes there will be a fundamental non-performance to demand assurance and withhold its own performance meanwhile (Art. 7.3.4).

Is arbitration always better than court for international contracts?

Not always. An award is usually easier to enforce abroad, but arbitrators’ and institutions’ fees can be out of proportion for small claims, and courts review awards only on limited grounds, so there is little room to correct a wrong decision. Weigh the size of likely disputes and where the other party’s assets are.

What makes a contract easier to enforce?

Clear obligations and deadlines, a defined notice and termination procedure, a sensible governing-law and dispute clause, and correct party names. Our guide on what to look for when reviewing a contract covers the full checklist.