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What constitutes breach of contract?

On Behalf of | Jan 31, 2022 | Business and Commercial Litigation

No matter what industry your company does business in it is likely that executing valid, enforceable contracts is a common and essential business practice. So, when the other party to the contract does not fulfill their end of the bargain, it can put your company in a real financial bind. When this happens, it is important to learn more about breach of contract.

What makes a valid contract?

There are several elements that must be met for a contract to be valid. One party must offer goods or services to another party, and the other party must accept the offer. Following that there must be an exchange of consideration, meaning that in exchange for the offered goods or services, the other party will give the offering party something of value such as money. Most of the time a contract must be in writing although there are some limited circumstances in which an oral contract may be enforceable.

What constitutes breach of contract?

A contract is breached if one party fail to follow through on their end of the agreement. A breach of contract can be material or minor, and actual or anticipatory. Minor breaches occur when the goods or services contracted for are not delivered by the due date. Material breaches occur when the goods or services provided are different from what is specified in the contract. An actual breach occurs when one party to the contract refuses to fully follow through on the agreed-upon terms of the contract. An anticipatory breach occurs when one party states ahead of time that they intend not to follow the terms of the agreement.

Protect your rights

If you enter a valid contract, and it is breached it is important to understand your rights so you can resolve your business contract conflicts. A breach of contract can significantly impact your company’s bottom line. By exploring all your remedies for breach of contract, you can make decisions that are in your company’s best interests.