Most people will eventually be a party to some type of contract. In case one party fails to live up to their contractual obligations, you should understand the basics of the law regarding breach of contract.
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by Edward A. Haman, Esq.
Edward A. Haman is a freelance writer, who is the author of numerous self-help legal books. He has practiced law in H...
Updated on: November 24, 2023 · 4 min read
At some point, most everyone is a party to a contract, and sometimes one of the parties fails to live up to their obligations. When that happens, it's important to understand breach of contract basics.
A contract requires each party to perform certain obligations. In the most basic form, these consist of one party providing goods or services, for which the other party pays. There may be additional requirements, such as specifications of the goods or services, time frames for completion, method of payment, etc. Failure by either party to meet their contractual commitment constitutes a breach of the contract.
There are two ways in which a breach of contract may be classified, the first being the seriousness of the breach:
A second way a breach may be classified is when the breach occurs:
When one party fails to meet their contractual obligations, the first step is to send the breaching party a written notice of the breach. If this fails to bring about a satisfactory resolution of the problem, the next step is filing a lawsuit.
The facts you must prove in court, called the elements of breach of contract, are:
Proving the first point is generally a matter of producing a copy of the written contract. The difficulty of proving breach of a verbal contract is readily apparent. This may be done by the testimony of one or both parties and of anyone else present when the terms were discussed and agreed to. State law, typically called the statute of frauds, requires certain types of contracts to be in writing in order to be enforced in court, such as contracts involving real estate or any contract that will not be completed within a year.
Under state laws, the statute of limitations for breach of contract typically requires that a lawsuit for breach of contract must be filed no later than four years from the date of the breach.
In most cases, the remedy is the payment of monetary damages by the breaching party, which can include:
In some cases, other remedies may be available but usually only if monetary damages aren't sufficient to compensate the nonbreaching party. These remedies are:
Although remedying a breach may not give you the full satisfaction of having the contract fulfilled, it can help compensate you to some degree. Clear and continuous communication between both parties may even help prevent a breach in the first place.
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