When one or both parties fail to meet the stipulations of a contract, without legal excuse, then it’s been breached. Contracts can be oral or written agreements. Oral contracts can be more difficult to prove.
When you enter into an agreement with another party, and they fail that agreement or inform you they will fail to meet their obligations outlined in the contract, then a breach occurs. When a contract has been breached, the innocent party has the right to receive damages as a result of the breach. (Click here for more information if you’ve been involved in a contract breach, and discuss your options with trusted legal business litigation professionals.)
Types of contract breaches?
Contracts can be breached in different ways, depending on the manner in which it was broken. For example, if you hire a plumber to finish a job that they are unable to complete, or you enter into a warranty with a manufacturer, each breach of contract can have its own special set of circumstances. Most contract breaches fit into these four categories.
Let’s say you hire a mechanic to fix your business’ vehicle, and the contract specifies that time is of the essence, or even outlines a deadline. However, your mechanic is unable to meet that deadline. You could be entitled to damages from your mechanic due to him not being able to meet the deadlines set out in your agreement. In the case of a minor breach, you are still required to pay the mechanic once the job is finished, but you can recover some damages as a result of the contract breach. The breach is minor because the breaching party failed to meet the contract’s specifications but you still receive the item, or service, detailed in your agreement.
If the breach impairs the contract, because the goods or services outlined in the contract are not as specified, then this is a material breach. The breach completely defeats the contract and you could be relieved of your obligations under the contract, and given the right to sue the breaching party for damages. Let’s consider if the mechanic fixes your car, but uses faulty materials that deteriorate, then you may have been the victim of a material breach.
A repudiatory breach is a serious breach because it goes against the root of the contract. Whether a breach is repudiatory is based on whether the innocent party can affirm or terminate the contract because of the breach. Also if the innocent party can claim damages, and they’ll retain this right regardless. If a contract totally breaks down, it can be considered repudiatory.
If the mechanic fixing your car tells you that he won’t be able to perform the services for you specified in your contract, then you may be entitled to damages due to an anticipatory breach. Anticipatory breaches are when the breaching party informs the innocent party, ahead of time, that they won’t be able to fulfill the obligations of their contract. The innocent party is then able to seek a remedy.
Legal Remedies for Contract Breaches
The remedies of a breach will be based on how severe the breach is. If a breach occurs, be sure to review the contract in case there are instructions on how to remedy the breach. You may be entitled to compensatory damages, restitution, punitive damages, or a specific performance of the contract.