Breach of Contract

What is breach of contract?

A breach of contract happens when one party fails to live up to or fulfill their responsibilities under a contract that they signed and agreed to without a clear and legally valid reason. When a breach of contract happens, the other non-breaching party, or injured party, may be able to terminate the contract and, in some cases, may be able to take legal action against the other party. 

There are several classifications of breach of contract, including the following.

• Minor breaches: A violation of a small component of the contract that may not impact the fulfillment of the contract. These breaches are often partial breaches and may be remedied through negotiation.
• Anticipatory breaches: A party to the contract lets the other party know that they won’t be able to fulfill their responsibilities ahead of time.
• Material breaches: A violation of the contract that threatens the fulfillment of the agreement.
• Actual breach: The breaching party completely fails to follow through with their responsibilities as outlined in the contract.

Reviewing a contract before signing and making sure the terms work in each party’s interests may reduce the risk of breaches.

Breach of contract FAQs

What happens after a breach occurs?

It depends on the severity of the breach. For minor breaches, the parties may be able to renegotiate new terms and complete the contract. For actual breaches, the non-breaching party may terminate the contract and could pursue legal action against the breaching party if they suffered damages.

How do you prove breach of contract?

To successfully prove breach of contract, you must be able to show four key elements. This includes the following:

1. The non-breaching party must show that a valid contract existed between the parties. This can be an oral contract or written contract.
2. The non-breaching party must prove performance of contractual obligations outlined in the contract or provide a reason for not fulfilling contract terms.
3. The non-breaching party should provide evidence showing that the breaching party failed to fulfill their obligations.
4. The non-breaching party must provide proof of the damages they suffered as a result of the breach.

Is it worth suing for breach of contract?

Every situation is unique, and suing for breach of contract may not always be the right option. It depends on the non-breaching party’s losses, concerns, and other factors. It’s a good idea to seek legal advice from an attorney well-versed in contract law if you’re considering taking legal action.

How is a breach of contract typically resolved?

Most breach of contract situations are resolved through negotiation, and in many instances, the non-breaching party receives compensatory damages for the losses they suffered. However, some breaches, especially those that are severe or those that result in significant losses, may go to court.