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 What Is A Breach Of Contract?

A contract is an agreement between two or more parties, which creates legal obligations that are enforceable by law. Contracts must be created by the mutual assent of all of the parties involved, and cannot be forced by fraud or duress. In order to create a contractual relationship, one party offers terms to the other party, which are then accepted by the latter.

Contracts are generally written documents which are signed by the parties. Additionally, a true legal contract must have consideration, which is something of value, in order to make the agreement binding. There are a number of ways that the element of consideration can be filled. Money would be the obvious example, but consideration can be anything as long as it is something of value to the parties involved.

A breach of contract occurs when a party to a valid contract has failed to fulfill their side of the agreement. The terms of a contract guide the parties in terms of what they must do, and how they should do it, in order to maintain their promise. If one party does not do what the contract instructs them to do, the non-breaching party can file a lawsuit against them in court.

There are three ways in which a party can be held liable for breach of contract:

  • Anticipatory Breach: This type of breach occurs when the breaching party tells the non-breaching party that they will not be fulfilling the terms of their contract. Once the other party has been notified, they can sue for breach of contract;
  • Minor Breach: A minor breach of contract happens when one party fails to perform a small detail of the contract. The entire contract has not been violated, so it can still be substantially performed. This is commonly associated with a technical error with the contract, such as a typo; and/or
  • Material or Fundamental Breach: This occurs when the breach is so substantial that it essentially cancels the contract, because it renders performance by either party impossible.

Some other ways that a contract can be breached include:

  • When the contract is fraudulent;
  • If the contract was formed illegally or is unconscionable; and
  • When there is a mistake of fact present in the contract terms.

What Are Some Examples Of Contract Violations?

In addition to the previously mentioned examples of a breach of contract, there are many other ways in which a contract can be violated.

Some other examples of common violations include:

  • The buyer fails to provide payment (or underpay) for their purchase;
  • The seller fails to deliver goods or services to the buyer as agreed;
  • Breaking non-competition clauses by entering into a contract with another party outside of the original contractual relationship;
  • The seller fails to provide the proper product or product amount as agreed upon;
  • Delivering a product of lesser quality;
  • Illegally terminating the contractual relationship;
  • Terminating the relationship against contractual specifications; and
  • Failure to deliver the product or service on time.

What Are Some Remedies For Contract Violations?

If a party has knowingly breached the contract, they should take the necessary steps in order to fix the breach immediately. They should also correct their mistake before the other party becomes aware of the breach, or before they can file a lawsuit against them.

The following are some general steps that you should take if you have breached a contract:

  • Review the contract and find the section that discusses what the parties can do in the event of a breach. An example of this would be a clause in the contract stating that the agreement is terminated, and there is no way for the parties to resolve it. Alternatively, the contract may state that a party has a specific time frame in which they can fix the issue before the non-breaching party can file a lawsuit;
  • If you discover that you cannot completely fix the breach, you should speak with the non-breaching party in order to show good faith. This can help you appear more favorably in front of the court if the issue results in a lawsuit. Additionally, you may be able to find a way to resolve the breach on your own, without the intervention of a court; and
  • You should look for another way to fulfill the requirements of the agreement. This will show the court that both parties attempted to work cooperatively, and tried to solve the issue before they resorted to legal action.

Alternatively, when you are a non-breaching party to a contract, you have a right to file a lawsuit against the breaching party. You should take some steps before filing a claim, which include:

  • Reviewing the contract. Look for clauses that say what to do in the event of a breach, whether there is a liquidated damages clause, and if the breaching party has a specific amount of time in which they can try to fix the breach;
  • You should give the breaching party a chance to resolve their mistake. If they cannot fix the issue, but they are willing to compromise in a way that fulfills your needs, it is beneficial for both parties to come to an agreeable solution and not involve any legal action. However, you are not obligated to say yes to a remedy that does not fully resolve the breach, or does not sufficiently compensate you for the damages that you suffered from the breach; and
  • Once all other options have been exhausted, you should file a lawsuit with the court. Before filing, collect any relevant documents proving that the other party breached the terms of the contract.

In terms of remedies for contract violations, the most common would be monetary damages. However, there are some circumstances in which money will not fix the harm that the breach causes. Under such circumstances, the plaintiff can ask for an alternative remedy.

One of the most common of these would be specific performance, when the court orders the liable party to perform the broken contractual duty in order to compensate for the breach. Examples include ordering the defendant to render payment as specified in the original contract, or ordering them to deliver the product or service as specified.

It is important to note that the law only allows for damages that are intended to compensate the plaintiff for injuries and/or damages caused by the breach. What this means is that no punitive damages are awarded in contract law. Another potential remedy would be the right of termination, in which the plaintiff can choose to terminate the contractual relationship altogether.

The defendant may argue that a contractual relationship never existed, such as through lack of consideration. In such cases, the wronged party might be able to seek some relief through the legal doctrine of Promissory Estoppel. If the plaintiff can show that they reasonably relied on the defendant’s promise and experienced harm as a result, a civil court might award damages in spite of the fact that no contract existed. This is intended to stop lying and deceitful parties from avoiding their duties on technicalities.

Do I Need An Attorney For Contract Violation?

Because contract law varies from state to state, it is important to work with an experienced contracts attorney in your area. An experienced and local attorney can inform you of your legal rights and obligations under your state’s specific laws, and will also be able to represent you in court as needed.


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