The Psychological Contract Is an Unwritten Set of Commitments Between the Employer and Employee. It Plays a Vital Role In Influencing Job Attitude and Performance of the Employee. This Research Paper Aims to Explain the Formation of a Psychological Contract, Its Model and the Consequence of the Contract If Violated or Broken. the Study Aims at Creating a Deeper Understanding on Psychological Contract and Employee’S Behaviour If the Breach of Contract Takes Place.