For any transaction, it is always important to have the right contract in place. However, no matter the relationship of the parties involved or how carefully you have chosen your contracts, sometimes you just cannot stop a breach of contract from occurring when there is a contract dispute.
For this reason, it is always best to be prepared and to know your options if a breach does occur. If you already find yourself amid a breach of contract dispute, then it might be time to look up local lawyers. Just search breach of contract lawyer near me on Google to return a wealth of options. Otherwise, check out our guide for everything you need to know about breach of contracts.
What is a Breach of Contract?
A breach of contract occurs when one or more parties fails to deliver on their obligations as stipulated within a contract. They may fail to perform their duties as specified, fail to deliver on their side of the contract at all or fail to abide by the terms and conditions of a contract.
The Different Types of Contract Breaches
- Minor Breach: A minor breach of contract refers to a situation where the deliverable of a contract was ultimately obtained by the receiving party, but some part of the contractual obligation was not fulfilled. In minor instances, such as late delivery, it will be up to the receiving party to prove that the breach resulted in financial loss.
- Actual Breach: An actual breach of contract refers to a breach that has already occurred in a contract dispute, which means the breaching party has either refused to fulfil their obligations by the due date or they have performed their duties improperly or incompletely.
- Anticipatory Breach: In the case of an anticipatory breach, a breach of contract has not yet occurred, but one of the parties have indicated that they will not fulfil their contractual obligations. This can mean one party has explicitly told the other they will not be able to deliver, or it can be inferred based on the parties’ actions.
- Material Breach: A material breach occurs when one party receives a significantly lesser or different result than what was stipulated in a contract. For example, a builder using lower-quality materials than what they had agreed to.
Remedying a Breach
In the event of a breach of contract, there are important points you must consider before pursuing legal action.
- You must prove the existence of the contract in question – Ensure there is a provable contract in place for both parties, a verbal contract, for example, can be extremely difficult to prove in court.
- Can you prove that the other party did not deliver on their obligations? – The terms and conditions of the contract must be evaluated and compared to the actions that have taken place, to show how said terms have not been met.
- Can you prove that you suffered a loss as a result? – The affected party must prove they have suffered a financial loss because of the breach, which requires compensation. You may also be required to prove that you have taken reasonable steps to mitigate your losses.
If you have all these points covered and you are prepared to pay for the costs of pursuing legal action, then you may be able to receive compensation. Compensation will usually be in the form of:
- Damages – Wherein in the affected party is put back in the position they would have been in if the terms of the agreed contract had been met.
- Repudiation – The contract is terminated by ‘repudiation’ and compensation is paid to cover the losses you have suffered.
It is best to be prepared ahead of time to know what to do in a business contract dispute.