Before a breach of contract can occur, there needs to be a valid contract. Depending on each situation, you have to determine whether or not a contract was formed between the parties. A contract is an agreement between two or more parties where each party agrees on specified terms. The agreement can be either written, verbal, or implied.
As stated earlier, to sue, you need to have a valid contract that was breached. The court examines the following factors to determine if you had a valid contract:
- A mutual agreement: Both sides need to agree to the terms of the contract;
- An offer and an acceptance: One side makes a clear or definite offer and agrees to the terms of the contract while the other side accepts that offer of that contract;
- Consideration: Each party to a contract must provide something of value to the other, and they need to exchange it;
- Capacity by all parties: Each party must be aware of their capacity and actions. For instance, a minor may not have adequate mental capacity for the courts to enforce the contract and;
- Legal purpose: There must not be any agreement to conduct illegal activities. The contract cannot be against the law.
Moreover, some contracts must be in writing to be valid. If a contract falls into this category, you cannot enforce it in court unless it is in written form. If you need further assistance to determine if your contract is in this category, please seek out a lawyer to review your case.
What Constitutes a Breach of Contract?
Generally, if there is a dispute about the contract among the parties, the case will be brought to court. If either party claims that there has been a breach of contract, the judge will decide on the case.
A breach of contract is a failure to perform any promise that forms all or part of the contract without a valid legal exception. This consists of not meeting the specific industry standards or the requirements of an express warranty or implied warranty, including the implied warranty of merchantability.
What Factors Does the Court Examine in Claims of a Breach of Contract?
The courts recognize some factors that determine whether or not the parties breached their contract. Each party must examine their situation and figure out if they failed to meet the terms of their agreement. Below are some questions to consider when faced with this situation.
Initially, the critical issue that must be addressed is whether or not a valid contract existed between the parties. Then, determine what type of contract it is and whether or not an actual breach occurred. If so, was the breach material to the contract, and did the breaching party have a legal defense to enforcement of the contract? Moreover, there are other factors the courts consider in determining materiality, including:
- The amount of benefit granted by the non-breaching party;
- Whether the non-breaching party can be compensated for the damages;
- The extent of performance by the breaching party;
- Any hardship to the breaching party;
- Negligent or willful behavior of the breaching party;
- The probability that the breaching party will complete the remainder of the contract.
What Are the Different Types of Breach of Contract?
Several different types of breaches of contract can occur in any situation. The parties’ obligations and remedies vary upon which type of breach occurred. A breach is considered material if, as a result of the breaching party’s failure to perform adequately, the other party receives something substantially different from what the contract specifies.
For instance, if the contract specifies the sale of a box of diapers and the buyer receives a box of napkins, the breach is material. Once a material breach occurs, the non-breaching party is not obligated to perform under the contract. Furthermore, they have a right to all remedies for breach of the entire contract.
As mentioned above, a material breach is when you receive something completely different than what you were supposed to in the agreement. Another type of breach of a contract is considered minor. A breach is minor if, even though the breaching party failed to perform some aspect of the contract, the other party received the item or service stated in the contract.
For example, a reasonable delay in service of the goods or delivery is considered minor if the contract does not specify a deadline. When a breach is minor, the non-breaching party is obligated to perform under the contract but can recover damages resulting from the breach.
For instance, when a seller fails to deliver the goods is considered a minor breach of contract, the buyer must still pay for the goods but may recover any damages caused by the delay. A minor breach occurs when there are few changes or adjustments to the contract that do not drastically impact the terms.
If you have questions or issues regarding this matter you can reach out to your local contract attorney to discuss your case. Another type of breach of contract is an anticipatory breach. This occurs when the breach has not happened yet but one of the parties expresses their intention to breach the contract’s terms.
They send a notification, and the breaching party expresses its intention to not fulfill its contract. The reason behind this decision can either be due to some incapacity or be intentional with no excuse. However, the breach can also be implied through their actions and occur when one of the parties fails to comply with the terms. An anticipatory breach of contract becomes an actual breach once the date when obligations were due to be performed passes.
As stated earlier, the actual breach of contract describes the failure to perform certain contractual obligations after the date they were due or not performing them to a sufficient standard by this date. The actual breaches can be categorized as being either material or minor. Depending on each case, the remedies will vary based on the consequences of failing to fulfill the contracts. Legal remedies are available for the parties whose contract terms are not performed adequately.
The most severe type of contract breach is known as the repudiatory breach of contract. This occurs when the breach touches the focal point of the contract and fundamentally undermines the purpose along with the performance of the contract.
Generally, this situation would cause the breakdown of a contract in its entirety, unlike a minor breach of contract. However, this may not necessarily equate to the termination of the contract. They can still reconcile and agree to move forward with the existing contract.
When Do I Need to Contact a Lawyer?
Every contract creates a relationship between the parties, and the terms specified in the contract must be fulfilled. However, in reality, situations can arise where either party may not be able to fulfill their obligations. A breach of contract can occur, and legal remedies are available for the wronged parties. If your rights under the contract have been breached, you can reach out to a local contract lawyer to assist you with your case. Fulfilling your end of the contract is considered mandatory under the law, and failing to do so will result in legal action.
