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Check this http://www.howstuffworks.com/circuit-breaker.htm
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A circuit breaker acts as a safety device for protection against sudden increase in current.
A circuit breaker consists of an iron core which is surrounded by a current carrying coil, which is derived from the supply itself.In normal state,the circuit remains in closed state and coil is weakly magnetized.When the current increases, the coil gets strongly magnetized and pushes the switch which release the contact.This saves the whole circuit from getting fried due to sudden surge of current.