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What constitutes a breach of contract?

On Behalf of | Jan 4, 2022 | Business Law

A business contract is the written agreement between parties to memorialize what they will do for each other. A breach occurs when one side does not fulfill the respective terms and conditions.

A breach of contract means one party has broken the agreement. Not all breaches happen in the same way or with the same repercussions. Discover the common contract breach types to help identify misgivings in the future.

Minor breach

Delivery delays may occur, which may set the intended receiver back somehow. This minor breach of contract may not cause significant harm, but if it results in the receiver losing money, the delinquent party may need to pay it back. Minor contract breaks may resolve between a separate agreement of the parties rather than through court.

Anticipated breach

An anticipated breach of contract occurs when an event makes it unlikely one party will meet a specified deadline. This usually results in the breaching party informing the other that they cannot fulfill their end of the agreement either in whole or part. The innocent party may take steps to either modify the contract or bring legal action against the anticipated breach.

Material breach

Sometimes the performance indicated in the contract falls short of expectations. A material breach may cause the innocent party actual harm short and long term. Either the breach needs rectifying and the shortfall fixed, or the innocent party may get an award of damages through court proceedings.

When one contract party does not do the right thing, the consequences may prove dire for the other. However, a properly negotiated contract may allow the victimized party to take action and recoup financial damages suffered in a breach.