A failure to perform according to the terms of the agreement is called?

A failure to perform according to the terms of the agreement is correctly identified as a breach of contract. When one party does not fulfill their obligations as outlined in the contract, it constitutes a breach. This can involve not completing tasks promised, failing to make payments, or any other noncompliance with the agreed-upon terms. As a legal concept, a breach of contract allows the harmed party to seek remedies, which can include damages or specific performance, depending on the situation.

The other terms presented do not accurately define the failure to perform under a contract. Default generally refers to a failure to meet an obligation, particularly in financial contexts, but it is not as comprehensive as "breach of contract." Contract termination indicates the conclusion of a contract, rather than the failure to meet its terms. Incapacity regards a party's inability to enter into a contract legally, which is unrelated to the performance of agreed terms. Thus, breach of contract is the term that specifically captures the essence of not performing as stipulated in a contract.