Contract breaches and disputes can create a variety of different types of headaches for businesses and busines owners. For that reason, it is helpful to understand what a breach of contract is and what the non-breaching business owner can do about it.
Types of breach
Contract breaches can generally fall into two categories including minor breaches and major breaches. The type of contract breach claimed can impact what the rights and remedies of the nonbreaching party are. If the contract breach is considered minor, the party that is in breach may be given time to remedy the breach. Minor breaches are considered breaches that do not impact the most important aspects of the contract such as the price of the goods or delivery of the goods.
A material breach, on the other hand, is a breach of that goes to the heart of the terms of the contract and agreement between the parties. In general, if there has been a material breach of the contract, the nonbreaching party will not be required to perform their obligations under the contract and the contract may also specify an amount of damages which are referred to as liquidated damages.
Remedies for breach of contract
The remedies available for breach of contract can depend on the terms of the contract and the nature of the breach. In general, liquidated or other monetary damages, referred to as compensatory damages, may be available in addition to recission of the contract or specific performance of the contract. Recission of the contract essentially tears up the contract and the parties are not required to perform and specific performance of a contract, the opposite of recission, orders the party or parties to perform on the contract.
A contract dispute can cause time and money which is why nonbreaching parties need to understand the legal protections available to them. Legal resources can help parties impacted by a breach of contract resolve their contract dispute and get on their way.