The Basics of Breach of ContractAuthor: Russ Janklow
One of the most common types of business litigation is a breach of contract claim. A breach of contract occurs when one or more of the involved parties fails to honor a binding agreement. A breach can include non-performance or interference with the performance of contract conditions. Breach of contract is considered a type of civil wrong.
Several conditions need to be meet to prove that breach of contract occurred and needs to be resolved in the court system, including:
The contract in question existed.
The contract was broken.
The plaintiff lost money.
The defendant (aka the person or business that is being challenged) was responsible for that loss.
The last two are the hardest to prove. It is very difficult to prosecute for breach of contract unless it can be shown that the plaintiff lost money, or would have in the future. Not only that, but the plaintiff must show that the defendant was the cause of the lost money, and that, if they had continued through with their contract successfully, the money would not have been lost.
Once it is determined that there was a breach of contract, an attorney can then assist a client to determine whether the case should go to court or be negotiated outside of court.
There are a few different types of contract breaches:
Material breach: This is defined as the failure to perform one's duties as set in the contract. These cases are likely to end up in court. (Example: A man hires a woman to mow his lawn every month. The man pays her for the entire year at the beginning, but then the woman does not mow the lawn for four months in a row. She has not performed her duties, and the man has lost money.)
Fundamental breach: This is a breach so fundamentally against the nature of the contract that a plaintiff can stop performance of the contract, as well as sue for damages. This breach occurs when something so detrimental happens that it is obvious that the contract will not be fulfilled on time, and that the plaintiff has already lost money. (Example: A woman buys a yacht. During her first and second attempts to launch her boat, the vessel stalls and won’t restart. The woman claims that because the yacht was new and broken within 48 hours of its first use, it was a fundamental breach of contract.)
Anticipatory breach: Allows one person to say the contract is broken when it becomes evident that the other party will not go through with their end of the contract in the allotted time. (Example: A landscaper is contracted to finish a gardening project by September 1, but then by October 29 he hasn’t even started the project. It is now impossible that he will finish the project by the September 1.)
Minor breach: A part or section of the contract has not been completed. The plaintiff might be able to sue for monetary damages, although a correction is more likely. (Example: A company is hired to build a website. They complete the majority of the website on time, but there are spelling errors in the copy and no links.)
Before considering legal action, an experienced attorney should review an initial contractual agreement and look for any prior agreements on contract remedies. They will then be able to advise you on whether or not you have been the victim of a breach of contract.
There are numerous different remedies and reparations that are possible in the case of a breach of contract. If you believe that a problematic business relationship ended in a breach of contract, contact the attorneys at Janklow Law. We have extensive experience in business litigation, and can help you get the remedy you deserve.