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What Constitutes A Breach Of Contract

In the realm of business transactions, contracts serve as the foundation for agreements between parties, outlining rights, obligations, and responsibilities. However, when one party fails to fulfill its obligations under the terms of a contract, it constitutes a breach of contract. According to a business litigation lawyer who works in contracts quite a bit, there are several different types of breach you should be aware of:

Definition Of Breach Of Contract

A breach of contract occurs when one party fails to perform its duties as outlined in the contract without a valid legal excuse. Essentially, it means that one party has not lived up to the promises or obligations specified in the agreement. These obligations could include delivering goods or services, making payments, meeting deadlines, or adhering to specific terms and conditions outlined in the contract.

There Are Generally Three Types Of Breaches Of Contract:

1. Material Breach: This is the most serious type of breach, where one party fails to perform a significant aspect of the contract, thus depriving the other party of the benefit they expected from the agreement. In a material breach, the non-breaching party is typically entitled to seek damages and may be released from their own obligations under the contract. This might look like a contractor who was asked to build a deck but only puts up the frame for it and does not finish the deck.

2. Minor Breach: Also known as a partial breach, this occurs when one party fails to fulfill a minor aspect of the contract that does not significantly impact the overall agreement. While the non-breaching party can still seek damages, they are still required to fulfill their own obligations under the contract.

3. Anticipatory Breach: This occurs when one party indicates, either through words or actions, that they do not intend to fulfill their obligations under the contract. In such cases, the non-breaching party may choose to terminate the contract and pursue legal remedies for breach of contract. 

When a breach of contract occurs, the non-breaching party has several legal options available to seek remedies for the damages suffered. These remedies may include:

  • Compensatory Damages: Monetary compensation intended to cover the losses suffered as a result of the breach, including lost profits, expenses incurred, or other direct damages.
  • Specific Performance: In cases where monetary damages are insufficient to remedy the harm caused by the breach, the non-breaching party may seek a court order requiring the breaching party to fulfill their obligations under the contract.
  • Rescission: This involves canceling the contract and restoring the parties to their pre-contractual positions. Rescission is typically pursued in cases of material breach or when the contract is deemed voidable due to fraud, duress, or other factors.

When faced with a breach of contract, it’s essential to seek guidance from a qualified business lawyer. According to our colleagues at Eric Siegel Law, attorneys specializing in business litigation can provide invaluable assistance in assessing the breach, evaluating legal options, and pursuing remedies to protect your interests. With their expertise and advocacy, business litigation lawyers can help you navigate the complexities of breach of contract disputes and achieve a favorable resolution. Whether you’re seeking damages, specific performance, or contract rescission, having experienced legal representation can make all the difference in securing a successful outcome.
You can also work with a lawyer before accepting a contract in order to ensure that what is outlined in it matches your expectations of the work to be done. By seeking guidance from a skilled business lawyer, individuals and businesses can navigate breach of contract disputes effectively and protect their rights and interests. Reach out to a business lawyer near you for help to review your contracts today.