What counts as a breach of contract?
When creating an agreement with a party, you sign a document, or a contract, stating you will abide by the terms and conditions both parties have mutually agreed upon. When a party fails to obey the terms of the contract or derails from it, this is called a breach of contract.
As high profile clients create agreements with one another, contracts are created to protect their own interests. In most cases, a breach of contract occurs when one of the two parties fails to execute an obligation in a timely manner. As there are two categories a breach of contract falls into – immaterial or material – determining the categorization will decide what the appropriate legal approach should be.
The Two Types of Contracts
There are two types of contacts that are both legally enforceable: Oral and written contracts. As advised, take extreme caution as you enter an agreement that is secured by a handshake. Should you go into an agreement with someone, make sure the agreement and its specifics are written down so they are remembered as is and not misconstrued later.
Contracts are breached when:
- One party does not perform what they agreed upon
- One party openly states they will not be following the agreement further
- One party takes an action that does not allow the other party to fulfill their duties
What Must Be Proven?
The following three elements must be proven in order to prove a breach of contract:
- The existence of a contract
- An unexcused non-performance of an obligation under the contract amounting to a breach of contact
- Damages caused by the breach
What happens when a contract is breached?
If your contact is breached by the other party, you may be entitled to different remedies. When it is proven the contact has been breached, you are entitled to be placed in the position you would have been in if the contract was fulfilled completely. However, you are not entitled to be put in a better position by a recovery of damages for the breach.
Contact us at Hurley Law to ask any questions you may have about a breach of contract situation.