Simply put, a contract is an agreement between two or more private parties. This agreement creates mutual legal obligations and may be either oral or written. It is important to note that oral agreements are more difficult to enforce in a court of law.
In fact, some contracts are actually required to be written in order to be enforceable. An example of this would be a contract that involves a significant amount of money, such as over $500.
All valid and legally enforceable contracts must contain the following information:
- An offer, such as what one party will pay the other party for a specified amount of goods or services;
- An acceptance of the presented offer;
- A promise to perform;
- A valuable consideration;
- The time or event in which the performance must be made;
- The specific terms and conditions for the performance; and
- What should happen if one or both parties fail to abide by the contract’s terms.
What is a Breach of Contract?
A breach of contract occurs when the agreement is not kept, due to the fact that one party does not fulfill their obligations as specified by the contract’s terms. Some examples of how a breach may be made include but are not limited to:
- One party failing to perform in the specified timeframe;
- One party fails to perform at all;
- One party performs, but not in accordance with the specified terms; and
- One party fails to sign and therefore verify the contract.
Essentially, if either party fails to fulfill their legal obligations as specified by the contract, that party has breached the contract. The party who experiences any losses due to the other party’s breach may be compensated for their losses.
The general rule of contract law applies, but it is important to note that many contracts contain a provision regarding what should be done in the event of a breach. Breaches of contract can be minor, material, fundamental, or anticipatory. This article will discuss the differences between minor and material breaches of contract.
What is a Minor Breach of Contract?
A minor breach occurs when one party substantially performs or meets the essential obligations of the contract, but does not meet a minor condition. The breaching of this minor condition does not significantly affect the contract’s terms. All parties involved can otherwise fulfill any remaining contractual obligations in spite of the breach. A minor breach may also be known as a partial breach.
Although the breach may have been minor, the non breaching party may still sue the breaching party for any damages caused by the failure to perform the minor detail. A minor breach requires all parties to complete their obligated performance of the contract. A party would not need to perform its part of the contract when a material breach occurs.
What is a Material Breach of Contract?
A material breach of contract is substantial enough that it excuses the non breaching party from performing their obligations per the contract. An example of this would be a home purchasing contract in which the seller refuses to give the buyer the keys to the home although the buyer completed all contract terms.
The breach is so substantial that it impairs the contract as a whole, and renders the purpose of the agreement completely defeated. A material breach may also be referred to as a complete breach.
What Can Be Done About a Minor or Material Breach?
The main difference between a minor breach and a material breach is the severity of the breach. A material breach is considered to be much more serious, as it makes completing the contract difficult or impossible. A minor breach is insignificant enough that the rest of the contract can be completed in a generally satisfactory matter.
As previously mentioned, the non breaching party may sue for damages caused by the minor breach, but both parties must continue any necessary further performance. If either party refuses to fulfill the rest of the contract, that party may then be held liable for a material breach.
Once one party has committed a material breach, the non-breaching party may refuse to perform and sue either to compel the breaching party’s performance, or for any damages caused by the breach. If a material breach occurs, it is important to document the exact nature of the breach and ensure that it is actually in violation of the contract.
Most contracts contain information on what should be done in the event of a breach in order to minimize the harm that both or either party may experience.
Do I Need an Attorney for a Minor or Material Breach of Contract?
If you are involved in a contract and that contract is breached, whether by you or another party, you should immediately consult with a contract attorney. A contract attorney in your area can review your contract to ensure that it is legally enforceable, as well as determine what type of breach may have occurred. Additionally, the attorney can file a lawsuit on your behalf and represent you in court when needed.