Breaches of contract happen all the time. Anyone who enters legal agreements is at risk of breaching a contract – especially when the contract obligations are not enforced properly.
Not respecting the contract obligations is something that can result in a contract dispute. If you’re a business owner and made a deal with another business, but the other party didn’t respect their obligations, it can lead to a lot of losses for you.
How do you know when a breach of contract occurred, though, and how do you solve this issue? Let’s see!
What Is a Breach of Contract?
A breach of contract refers to the violation of any of the contractual obligations from a binding contract. The violation could be anything, including the failure of delivering a certain asset or making a payment.
Sometimes, breach of contract situations are intentional, as the other party may refuse to fulfill their end of the bargain. In other situations, the failure may simply be accidental.
Since a contract is binding, the suffering party can take the matters to court. But first, they have to prove the breach of contract for a successful claim.
Can the Breach of Contract Risk Be Decreased?
It’s hard to prevent a breach of contract from happening – after all, you have no control over what the other party does. You are only responsible for your own actions.
At the same time, there are a few things you may do to decrease the risk of a breach happening altogether. Here are some things that may help lower the risk:
- Try comparing similar agreements from the past and see which ones were successful and which ones resulted in breaches. The unsuccessful agreements may have common points that might’ve resulted in the breach, to begin with. Similarly, look at the successful agreements and see what parts had the best impact and eliminated vulnerable points.
- Always monitor the contract’s performance. This can help you make sure that both parties follow their obligations. On top of that, it might even allow you to see possible vulnerabilities before they ruin everything for you.
- Do your best to make sure everyone involved knows their responsibilities.
- Always make sure your contracts are accessible. The easier it is to access the details in the contracts, the lower the chances of a breach of contract become.
What Are the Different Types of Breach of Contract?
In order to recognize a breach of contract, you should be aware of all the different categories of breaches that might occur.
Minor Breach of Contract
A minor breach of contract could be anything like not paying an invoice by the due date. This could result in interest on the large sum until all the payment is sent.
Material Breach of Contract
Compared to a minor breach, a material breach of contract is more severe and has more disadvantages.
A breach of this sort is usually the non-performance of a fundamental or essential contract term – especially one that is very detailed in the contract. This type of failure may even be considered a failure to perform the contract.
One example of a material breach of contract could be not delivering an order to the ship before its sailing.
Anticipatory Breach of Contract
This is a timing-related breach of contract. In general, it doesn’t have to happen in order to keep the responsible party liable. Anticipatory breaches of contract haven’t occurred yet, but one party has pointed out that they won’t meet their contractual obligations.
Actual Breach of Contract
An actual breach of contract involves a party that has not met its obligations from the contract. They either performed their responsibilities improperly or incompletely or they simply didn’t want to fulfill their obligations before the deadline.
How Are These Problems Usually Solved?
How a breach of contract is dealt with depends on the situation and the severity of the breach. For instance, the party that failed to fulfill their obligations may be obligated to either fix the problem within a certain amount of time or deal with the consequences, which often involve the termination of the contract.
Sometimes, the party that didn’t breach the contract will sue the other for the issues caused. If the suffering party is successful in proving the breach, the court will apply the right remedy, including an injunction, compensation for damages, and others.
In Solana Beach, California, where there are a lot of businesses involved in all types of deals, the risk of breach of contract is very high. Therefore, the party that doesn’t breach the contract may want to calculate damages. If you’re in this situation, you may want to consider hiring Solana Beach employment lawyers to help you out.