What is a breach of contract?
Contracts are important in business because they enable the parties involved to know what to expect from an agreement. They can be written or verbal, but they should always be followed. Businesses that meet the terms of contracts are usually known as reliable and reputable.
There are times when the terms of a contract aren’t met. This is known as a breach of contract. In some cases, this can lead to legal action against the party that didn’t meet their requirements. It’s possible that the parties involved in the contract may come to an agreement without involving the court or anyone else.
What are the types of breaches that can occur?
There are two basic types of breaches that can happen when a contract is broken. These include:
- Minor breach: This type of breach may be an inconvenience but it doesn’t cause a major problem with the business or any losses.
- Material breach: This type of breach is more than an inconvenience and leads to major problems or financial losses.
In addition, both minor and material breaches generally fall into one of two categories:
- Actual breach: This involves a breach that has already occurred.
- Anticipatory breach: This means that one party acknowledges in advance that they can’t (or won’t) meet the contract’s terms.
The remedies for contract breaches are sometimes outlined in the contract. They should be suitable for the type of breach and its consequences. More serious breaches should have more serious consequences.
Any business that has to deal with a breach of contract should know what options they have to handle the matter. Working with an attorney who’s familiar with contract law might be beneficial. It’s imperative that you consider what’s best for your company when you’re dealing with this type of situation.