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Breach of Contract: A Quick Guide

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Types and Examples: Contract disputes and lawsuits

Contracts are legally binding agreements between two or more parties, with the parties agreeing to play specific roles relating to the terms of the document. Ideally, all parties involved are happy to meet the terms of the agreement and no disputes arise.

But no matter how eager the parties seem or how simple the agreement is, you should always be prepared for the possibility of a breach of contract.

What Is a Contract Breach Example?

Put simply, a breach of contract is when one or more parties fail to keep to one or more terms laid out within a contract.

Some examples include not contributing the specified amount of capital to a shared business venture, not completing a service by the given date, or failing to meet the performance metrics laid out in the contract. Should one or more parties fail to fulfill their obligations, other parties are entitled to seek legal remedies.

Are There Different Types of Contract Breaches?

Yes. There are four main types of breach of contract. These are:

  • Minor or Partial Breach: With this type of breach, one or more parties fail to fulfill some aspect of the contract but do not go so far as to violate the contract as a whole. The aspect they fail to fulfill must be small enough that it does not stop the contract from serving its overall purpose or prevent other parties from meeting their obligations.
  • Material or Total Breach: With this type of breach, one or more parties fail to meet their obligations to the point that it impairs the functionality of the contract as a whole, defeating the purpose of the agreement. The parties who were meeting their obligations can then collect damages from the underperforming party.
  • Fundamental Breach: This type of breach is similar to a material breach. The only difference is that the violations of the contract are considered to be more egregious than with the former.
  • Anticipatory Breach: In this case, one or more parties inform the others that they can tell they will be unable to meet one or more terms of the contract. The party that is meeting its obligations is then entitled to seek some sort of remedy.

Breach of Contract Remedies

The answer to this comes down to how severe the breach is and what your losses are. It is advisable to speak with a contract attorney to determine the next steps to take since part of their role is to assist with disputes and enforcement. It is possible that if the breach is minor or your losses small that taking legal action will be more costly than rewarding.

Should legal action be best, there are four types of damages you might be awarded:

  • Compensatory damages, where you are reimbursed for your losses.
  • Restitution, where you are awarded things like lost wages and property repair.
  • Punitive damages, where you are given some form of restitution specifically as punishment to the breaching party.
  • Specific performance, where the breaching party is forced to fulfill their part of the agreement.

Protect Yourself and Work With a Vetted Contract Lawyer Near You

The best way to protect yourself in the event of a breach is to have a high-quality contract lawyer on your side. ContractsCounsel is a boutique marketplace that puts you into contact with vetted contract lawyers who know your industry as well as state and federal law. Protect your interests; work with ContractsCounsel.com.

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