A breach of contract refers to a violation of the terms of an agreement made between two parties. When one side fails to live up to the terms of the contract or interferes with the ability of the other side to fulfill its obligations, a breach can arise. When a breach of contract happens, the party claiming the breach can take the case to court. It is important to understand what to expect in a breach of contract case and how it might affect you.
Requirements of a Contract
Before a party can claim that a breach of contract has occurred, it must meet the four general requirements of contract law. First, the contract itself must be valid so it must not have been signed by a minor or by someone who was incapacitated and unable to agree to the terms. Second, the party claiming the breach must be able to prove that the breach in fact did occur. Third, the party claiming the breach must have fulfilled its side of the contract. Finally, the non-breaching party must give notice to the breaching party that a lawsuit is going to be filed against them for a breach of contract.
What Happens After a Contract is Breached?
If a breach of contract occurs, one or both sides may either try to enforce the contract as it is written or collect damages for the financial harm that resulted from the breach. Whether the action moves forward in small claims or regular court usually depends on the monetary value of the breach, which is different from state to state. In addition to taking the breach of contract to court, another options for parties involved in a contract dispute is to try and resolve the issue through alternative dispute resolution. Using a mediator or arbitrator, the parties come together outside of the court of law to discuss their differences and try to come to a resolution.
Remedies for a Breach of Contract
A breach of contract can happen in a number of different ways, but usually it occurs because one side failed to perform on time, did not perform in accordance to the details of the contract, or failed to perform at all. Depending on the circumstances, the breach of contract is categorized as either a material or immaterial breach, and this affects the potential remedies when a lawsuit is filed.
When a breach of contract occurs, there are three main remedies to resolve the conflict – damages, specific performance, or cancellation and restitution. Damages for a breach of contract can include compensatory damages, punitive damages, nominal damages, and liquidated damages. Specific performance refers to the court-ordered performance of the contract. This typically occurs when the terms of the contract are rare or unique and simple damages would not suffice. Cancellation and restitution may occur if the non-breaching party has conferred a benefit onto the breaching party in a contract. Cancellation and restitution are meant to put the non-breaching party back in the position they were before agreeing to the terms of the contract.
Contact a Contract Attorney Today
If you suspect that a breach of contract has occurred, or you have been named in a breach of contract lawsuit, contact the experienced business litigation team at the Wagenseller Law Firm today.