Breach of Contract: An Overview
In a perfect world, companies and individuals consistently honor all signed agreements and contracts. Oftentimes, however, reality bites! Contracts are breached, resulting from either an individual or an organization refusing or failing to carry-out specifics from a contract without a justifiable or rightful reason. Broken promises can cause tremendous frustration, economic damage, and emotional instability for all parties involved. Staying up-to-date regarding contract laws/regulations and possible remedies is not always possible.
Although breach of contract cases are often resolved in a small claims court, the average person may not be aware of the different types of contract breaches. You may be a victim of a breached or broken contract if your employer did not rightfully pay you for your time or when a construction worker you hired does not complete the established terms identified in the signed contract. These are just two examples. Let’s review some different types of contract breaches:
Material Breach of Contract
A material breach typically occurs when one party does not receive what was identified in the signed contract and the terms of the contract are significantly violated. One party is harmed and the purpose of the contract was unfulfilled. For example, a seamstress and a buyer enter a contract for the seamstress to sew a wedding dress and the buyer pays a deposit to the seamstress but the dress was never created. The buyer is damaged because she relied on the seamstress to complete an agreed-upon task.
A non-material breach is identified as a “minor” or “partial” breach because neither party is harmed. For instance, the contract states the seamstress will have the wedding dress ready by Friday at 6 pm, but the dress is not ready until Friday at 7 pm. This scenario presents a minor breach of contract because the buyer received the product within a reasonable time frame.
Sometimes referred to as “anticipatory repudiation,” an anticipatory breach occurs when one party in a contract manifests that he or she will not conduct their contractual obligations. Either verbal statements or actions indicate the party will not deliver his or her end of the deal, prior to the established due date. For example, Jill enters into a contract with Sally on June 01, 2019. Per the contract, Jill agrees to sell her car to Sally on June 10, 2019. However, she sells her vehicle to someone else on June 07, 2019. In this case, the aggrieved party is allowed to claim a breach of contract, seek damages, discontinue her section of the contract, or request assurance of fulfillment.
An actual breach occurs when an individual fails to meet his or her obligations as stated in the contract or performs inadequately. For example, John and Dan sign a contract stating that Dan will deliver customized furniture items to John by a certain date. However, on the scheduled date, Dan fails to deliver without providing a legitimate excuse.
Whether you’re operating a small or large business or accepting a new job, contracts are unavoidable. If you have experienced any type of contract breach, contact Stokes O’Brien at (619) 696-0017 to get the most qualified and experienced breach of contract attorney. Our legal professionals will help you remain calm as they navigate the legal arena to present all options.