Legal Definitions - efficient breach

An efficient breach is when someone intentionally breaks a contract because it would cost them less money to pay for the damages than to actually follow through with the agreement. This is different from accidentally breaking a contract.

For example, let's say a company agrees to sell a product to another company for $10,000. However, the company realizes that they can sell the product to someone else for $15,000. They intentionally break the contract with the first company and pay the damages of $10,000 because it is still cheaper than selling the product for $10,000.

The concept of efficient breach is widely accepted in the legal system, which means that when someone intentionally breaks a contract, they are only required to pay for the actual damages caused by the breach, not any additional punishment.