Breach of Contract

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What Is a Breach of Contract?

A breach of contract occurs when one party does not adhere to their conditions listed in the agreement between two or more parties that outlines a specific exchange of goods or services. Parties can breach a contract either in whole or in part. Common examples of a breach of contract include:

  • Not completing a project on time
  • Not providing payment on time
  • Not meeting the standards presented in the contract
  • Not completing the project as outlined in the contract

Identifying a Breach of Contract

In order to prove there's been a breach of contract so that you can seek compensation, you must confirm the following:

  • Contractual validity: Before you can bring your case to court, you must prove your contract is valid. This means it contains all essential elements specific to contracts in your state and was signed by all participating parties.
  • Breach of terms: You must prove a breach of contract occurred.
  • Plaintiff's terms: You have to complete all your obligations described in the contract.
  • Prior notice: Prior to suing, you must give notice to the defendant regarding your intent to sue. You can do so verbally, but written notice is easier to use as evidence.

Types of Breach of Contract

A breach of contract can occur in different ways. Understanding the differences between the types of breach of contract can help you identify when it happens. There are four main types of breach of contract — anticipatory, actual, material, and minor.

Anticipatory Breach of Contract

In an anticipatory breach of contract, one party notifies the other to let them know that they won't be able to fulfill some obligation in the contract. This often gives both parties an opportunity to work through challenges and either create a new contract or consider legal action.

Actual Breach of Contract

An actual breach of contract happens when one party fails to perform an obligation as outlined in the contract. Minor and material breaches of contract are both subcategories of actual contract breaches.

Material Breach of Contract

A material breach of contract happens when one party receives less than what was promised in the contract or an entirely different product than what was promised in the contract. The failure can be due to lack of time to complete the project or simply not performing the work as outlined regardless of time constraints.

Minor Breach of Contract

A minor breach of contract is also known as a partial breach of contract or an immaterial breach of contract. Contract failures in this category relate directly to the deliverable. The receiving party gets the product or service, but it may be late or missing minor elements. In order to seek damages, the receiving party must prove that the breach of contract resulted in a financial loss of some kind.

Breach of Contract and Lawsuit

Usually, the first step after a breach of contract occurs is to try and remedy the situation through mediation of non-legal means. However, if this approach is unsuccessful, the wronged party might seek a legal remedy through a lawsuit. The amount of money in question will determine whether you can enforce the contract in small claims court or large claims court.

Image via Unsplash by @yapics

Breach of Contract Remedies

When a breach of contract occurs, there are usually three general remedy options for the wronged party — damages, specific performance, and cancelation and restitution.

Damages

Damages, or payment, are the most common type of remedy for a breach of contract. Damages come in many forms and can depend on the industry, terms of the contract, and desires of the parties involved in the lawsuit. A few common types of damages include:

  • Compensatory damages: This remedy attempts to repay the wronged party an amount that returns them to their financial standing prior to entering the contract.
  • Punitive damages: These damages provide additional compensation to the wronged party for any pain or suffering. It's rare to see punitive damages applied to a breach of business contract, but it's not unheard of.
  • Nominal damages: Usually, nominal damages are a small sum meant to compensate the wronged party for a partial breach of contract in which there was no financial loss.
  • Liquidated damages: Some contracts list "liquidated damages" as part of the agreement. Should a breach occur, these are the damages awarded to the wronged party.

Specific Performance

The specific performance remedy involves the judge ordering the party at fault to complete a specific action, project, or obligation in place of damages. This is a rare remedy, and it is only used if monetary compensation could not replace or rectify the damage done through the breach of contract.

Cancelation and Restitution

Cancelation and restitution is a two-part remedy. First, the wronged party chooses to cancel the contract rather than seek specific damages. Then, they can sue the breaching party for restitution equal to whatever benefit the wronged party provided to the breaching party. Essentially, cancelation and restitution resets the wronged party to their financial state prior to the breach.

Breach of Contract Defenses

There are some defenses the breaching party can use if the breach of contract was out of their control. Common defenses include:

  • Fraud: The breaching party can use the fraud defense if the wronged party misled them in some way during the contract negotiation and signing.
  • Capacity: If the breaching party did not have the competency to enter a contract, either mentally or because they were underage when they signed, the judge can void the contract.
  • Illegality: Contracts that outline illegal activity, such as theft, are unenforceable in a court of law.
  • Mutual mistakes: Occasionally, the parties both misunderstood the intent or terms of their contract, leading to mutual mistakes or confusion.
  • Duress: If the breaching party was forced into the contract under duress, the contract can be voided.
  • "Dirty hands": This defense involves proving that both parties committed wrongdoing in the course of the contract.
  • Statute of Frauds: Some states require contracts be in writing in order to be enforceable.
  • Unconscionable contract: Sometimes, one party receives far more benefit from a contract than the other party. The judge can deem these contracts void.

Avoiding Breach of Contract

To avoid breaching a contract, it's vital you understand all the specifics and terms within the contract. During negotiations, ask any questions you have, double-check deadlines, and request any examples or clarity from the other party. Create a schedule for yourself to ensure you're meeting all deadlines and will have the final project delivered on time to avoid any contract breaches.

How to Handle a Breach of Contract

Should you breach a contract or should another party breach a contract and wrong you, it's best to consult a contract lawyer for guidance . They can review the contract and help you establish breach of contract necessities like what type of breach occurred, mediation, or legal representation in court if needed.

A clear, well-defined contract is the best way to avoid a breach of contract or to seek damages in the case of a breach. Connect with a contract attorney if you need assistance drafting a contract or seeking legal remedy for another party's wrongdoing.

Meet some of our Breach of Contract Lawyers

Mathew K. on ContractsCounsel
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February 1, 2022

Mathew K.

Founding Attorney
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Illinois
8 Yrs Experience
Licensed in IL
DePaul University College of Law

Kerbis' practice includes business and real estate transactions, estate planning, and limited scope litigation consulting. Mathew has negotiated deals involving multinational corporate franchises and has collectively helped hundreds of clients with their transactional, civil litigation, and appellate legal needs. Throughout his tenure as an American Bar Association leader, Mathew has advocated for legal education reform, interviewed ABA Presidents and State Appellate and Supreme Court Justices, and lobbied Congress on behalf of the legal profession. As a law student, Mathew served as an extern for the Honorable Justice Robert E. Gordon of the Illinois Appellate Court, First District.

Tina R. on ContractsCounsel
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Tina R.

AGC
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Arlington, VA
16 Yrs Experience
Licensed in DC, IL, VA
Loyola University Chicago

15 years for legal experience; expertise in contracts, healthcare, ERISA, physicians, financial services, commercial contracts, employment agreements, etc. I am adept at all contracts and can provide you with efficient and quality services. I have worked at a law firm, financial services company, consulting ,and non-profit.

Craig Y. on ContractsCounsel
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Craig Y.

Partner
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New York
27 Yrs Experience
Licensed in NY
New England Law - Boston

Craig E. Yaris is a partner at Parlatore Law Group, with the experience and drive to handle all your Franchise, General Business Practice, and Mediation needs. As a former small business owner and Chief Operating Officer of a franchisor himself, Mr. Yaris is passionate about promoting business growth. He has experience handling daily operations, employee disputes, and negotiations of pertinent contracts for a franchise company with 100 locations in five states, where he organized and conducted semi- annual meetings to educate and inform franchisees of best practices for improved growth. In addition, Mr. Yaris was responsible for the preparation and filing of the UFOC (Uniform Franchise Offering Circular) in several states and is well-versed in business formation. Between his time as Franchisor and Conflict Resolution Specialist, Mr. Yaris was the Co-Founder and Chief Operating Officer of an online company whose goal was to help inform marketers and business owners of the fast-paced and ongoing changes within their specific verticals. This experience helped him hone his research and writing skills and prepared him for the cloud-based aspects of Parlatore Law Group. Mr. Yaris also has extensive experience in public speaking, as he has planned and delivered several keynote addresses and educational seminars for many New York-based organizations, and as a Continuing Education Instructor for Hofstra University. Prior to joining Parlatore Law Group, Mr. Yaris worked as a Patient Advocate, and more recently, a Conflict Resolution Specialist, where he mediated and resolved disputes on behalf of patients with insurance companies. In this role, he negotiated for coverage of previously denied medications and medical procedures as well as successfully mediated disputes between individuals and business partners which would have otherwise resulted in protracted litigation. In addition, he has experience mediating employer and employee disputes as well as helping resolve family conflict. He has also studied and attended many Non-Violent Communication (NVC) workshops and strives to bring these tools and methods to all of his mediations. His variety of experiences speak to his ability to handle small business needs at all stages of business growth and development. Mr. Yaris also has experience with business growth and development, as he has worked with several small business on creating and implementing strategies for steady growth. In addition, to spending time with family, Mr. Yaris volunteers his time helping spread the message of the ACLU and he supports many local charities focused on families and children. He is admitted to practice in New York.

Nicholas V. on ContractsCounsel
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February 28, 2022

Nicholas V.

Attorney
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Denver, CO
5 Yrs Experience
Licensed in CO, NY, TX
Texas A&M University School of Law

I am a solo practitioner with offices in Denver, Colorado and Austin, Texas with a focus on general business and real estate contracts.

Meghan T. on ContractsCounsel
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4.8 (10)
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Meghan T.

Partner
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Atlanta
4 Yrs Experience
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Emory University

Meghan Thomas is an accomplished transactional attorney. She specializes in real estate transactional matters, property disputes, IP, tech and business contracts. Meghan's innovative leadership style has attributed to the firm's rapid development and presence in the metro-Atlanta market. She obtained her Doctor of Law from Emory University where she worked with the State Attorney General and litigated property disputes for disadvantaged clients. ​ Prior to practicing, Meghan negotiated complex transactions for Fortune 500 tech and healthcare companies. She lives with her family in Southwest Atlanta, enjoys cooking, travel, dance and continues to develop her research in the areas of transactional law and legal sustainability.

Kelvin R. on ContractsCounsel
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Cecilia O. on ContractsCounsel
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January 31, 2022

Cecilia O.

Contracts Attorney
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San Antonio
16 Yrs Experience
Licensed in CT, MD
Ghana School of Law

With 15 years of extensive transactional/contracts experience reviewing and negotiating commercial contracts including a wide variety of purchase orders and contracts and non-disclosure agreements (NDA), I believe I can immediately contribute to the continued success of your team. I have been commended for a range of valuable skills—excellent contract management and contract administration, legal research, risk analysis, drafting and negotiations, and strategic thinking. I have worked as a legal consultant for 10+ years and I have reviewed over 7,500 contracts through this position. Contracts I have reviewed include but not limited to purchase orders, commercial and construction contracts, equipment rental agreements, non-disclosure, confidentiality, vendor agreements, service agreements, site access agreements, international agreements, request for proposals (RFP), bids and government contracts. These experiences have enabled me to master the ability to work independently and expeditiously to identify and assess issues and provide legally sound recommendations, consistent with good business practices. I have led teams (sales, insurance and management) to successfully negotiate contract terms with customers. Effective Communicator and Negotiator. I am a people person, and for the past 13 years, I have acquired excellent oral and written communication skills that enable me to interact and negotiate effectively with stakeholders at all levels. I am a self-starter with a strong work ethic. I have a high degree of resourcefulness, diligence, and dependability. Most important, I adapt to changing priorities quickly, thriving in an environment with high volume and short turnaround deadlines. My experience over the years allows me to transfer my skills to all types of contracts to meet the client’s needs. I am hopeful to provide similar legal expertise, effective contract administration and leadership to your organization. It would be a pleasure to meet within the next few weeks and discuss how my qualifications, experience, and capabilities will best fit the needs of your outfit.

Antoine D. on ContractsCounsel
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February 7, 2022

Antoine D.

Owner
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Fort Lauderdale
7 Yrs Experience
Licensed in FL
Howard University School of Law

In his firm, Talented Tenth Law, Antoine focuses on helping people maximize their protection and prosperity in the courtroom and the boardroom. His firm’s services include representing people in lawsuits involving breach of contract, many types of civil lawsuits and helping business owners win government contracts among other things.

Tom L. on ContractsCounsel
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February 7, 2022

Tom L.

Managing Member
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Houston
16 Yrs Experience
Licensed in TX
Louisiana State University Law Center

Tom is a former chief legal officer of public and private companies. He has extensive experience in mergers & acquisitions, commercial transactions, joint ventures, finance, securities laws and general corporate law across a broad range of industries, including construction, consumer products, e-commerce, energy and healthcare. As an attorney who practiced at two different Top 50 international law firms, he can deliver "Big Law" service at a competitive price. Prior to becoming a lawyer, Tom served as an officer in the U.S. Army and attained the rank of Captain. He served a tour in Iraq where he led a reconnaissance platoon and was awarded the Bronze Star Medal.

Amy P. on ContractsCounsel
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February 9, 2022

Amy P.

Principal Attorney
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Edmonds, WA
19 Yrs Experience
Licensed in WA
The University of Montana School of Law

Amy has served as outside general counsel and litigator to established businesses throughout western Washington since 2010. Her passion and focus is providing the best possible representation for clients in the construction, transportation and hospitality industries.

Jacob O. on ContractsCounsel
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February 14, 2022

Jacob O.

Contracts Manager
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Iowa City
3 Yrs Experience
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University of Iowa - Law

I am bar certified in the lovely state of Missouri. I received my J.D. from The University of Iowa College of Law (2019) and my B.A. in Political Science from BYU-Idaho (2015).

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