What is a Breach of Contract?
When two or more parties enter into a contract with the understanding that it is legally binding, and one fails to follow their promised obligations, this can result in a breach of contract. Breach of contracts can occur in employment contracts, lease agreements, vendor agreements, and more.
According to Cornell Law, the remedy for breach of contract is to pursue the defaulting party for the monetary value that returns the complainant to the whole. Pursuing a suit against someone for breach of contract involves a couple of steps which we will discuss in this article. There are also multiple ways to breach an agreement, which we will also cover.
What Are the Four Ways To Breach a Contract?
There is not just one way to be in breach of contract. There are multiple ways, and they are listed below with brief descriptions.
Material breach of contract – material breach occurs when one of the parties receives significantly less than what the contractual agreement states. A material breach of contract is a little easier to prove as it would mean that one of the parties was left without the other party holding up the end of their obligations to the contract. Another way to prove a material breach of contract is if the duties were performed but not in the timeframe that was agreed upon, leaving one of the parties at a significant disadvantage.
Minor breach of contract – a minor breach of contract can also be called a partial breach, and the reason for this is that some of the obligations of the agreement were fulfilled, but the complete set of commitments was not, leaving one of the parties less than the whole.
Actual Breach of contract – refers to the breach that has already occurred and is evident, causing one of the parties to be at a significant disadvantage and choosing to pursue monetary repair.
Anticipatory Breach of contract – anticipatory breach occurs when the contract hasn’t yet been completed, but the other party anticipates they will not or can’t fulfill their obligations. The other party may not have been notified of their failure to fulfill obligations, but they cannot, causing significant monetary damage.
What Needs to Exist to Prove Breach of Contract?
A few items must be tangibly proven in a case involving a breach of contract. The elements are that there was a valid contract in place, that the terms of the agreement were not fulfilled by one or more of the parties involved, and that actual losses or monetary issues occurred as a result.
It is important to note that oral contracts may also be held up in court, in addition to written agreements. Each situation is different, so consult your experienced attorney to determine if you have the components necessary to pursue a breach of contract case.
Examples of Breach of Contract
There are nearly endless ways in which to breach a contract. Some of the most common forms are that two parties agree to a service being completed, such as siding on their house. The homeowner pays the contractor’s half up front, and only a small portion of the job is completed. In this case, the courts would review the contract and the monetary value the homeowner is out, charge the defendant accordingly, and require them to pay the difference to bring the owner back to whole.
Another typical example is if a supplier is contracted to provide goods or services promptly to the business owner and fails to do so. This would be an example of a breach of contract, and the supplier would generally be responsible for the losses the business owner suffered. Suppose the same supplier provided the agreed-upon goods or services, but they were late, or the obligations fulfilled were subpar, and the business owner was dissatisfied. They may still pursue a breach of contract suit against the supplier.
Is There a Way to Prevent Breach of Contract?
Without being able to control the actions or intentions of others, there is no bulletproof way to avoid a breach of contract. You can, however, plan and ensure that your arrangements are thoroughly designed to prevent any miscommunication or loopholes. You can review these contracts regularly to ensure that changes in protocol or regulations will not create issues.
You can also monitor relationships with suppliers, contractors, or anyone else you have entered into a contract with to remain vigilant and mitigate any issues. For example, if you are halfway through a project, you may want to check in and get an update to see if the other party is on schedule.
You can also clearly define what happens if the contract is breached so all parties know and avoid the consequences.
How Can a Business Lawyer Help Me With Breach of Contract?
An experienced business lawyer can help to review the agreements that you have in place to protect yourself better moving forward. They can recreate or edit the documents you have in place to ensure you are best set up to avoid the risk of breach of contract.
Experienced business lawyers can also negotiate with the other parties in the agreement to provide a solution that you are happy with or pursue legal options as necessary.
They can also assist you in gathering the evidence proving the breach of contract existed or was about to, so you are best prepared to recover the monetary losses you deserve in court.
Contact our office today at 303-557-2011 to learn how webreach of contraccan help you with your agreements or breach of contract questions.