28 Feb What Happens after a Breach of Contract?
A contract is the foundation for any business agreement, and you should always have a legal professional review it to ensure you are protected. Unfortunately, breaches happen quite often and result in many court cases. So, what do you need to know if a contract you are involved in is broken?
Recognize when Someone Breaks a Contract
A breach of contract is when requirements outlined in the contract are not fulfilled for any reason other than a valid, lawful excuse. A few common violations that can happen with just about any contract, including employee and vendors.
Here are the next steps
Most contracts contain a section outlining the details of what happens should a breach occur. It is important to read this thoroughly as it can prevent the waiving of any additional remedies. Depending on the contract, it may require an informal resolution request before formal legal action is pursued. Before attempting to enforce the terms, it is best to establish a few items: there must be proof of the contract; proof that the it was broken; proof of damages; and proof of which party was responsible.
Here are Potential Violations
The most common violation is the minor breach of contract. Typically, this happens when a party completes their end of the deal, but not to the quality that was promised. The most serious is the material breach of contract, which will often end up in court. Material breach of contract occurs when one party fulfills their obligations and the other does not. The affected business will be able to seek the proper damages in court. There are also fundamental and anticipatory breaches. Fundamental breaches occur when an individual becomes insubordinate and ceases to fulfill their requirements, and an anticipatory breach happens when it becomes clear that the other party member will not complete their end of the contract within the specified time.
Breaches are inconvenient for any small business or individual. It delays projects, wastes time and costs money. However, having a lawyer available to handle this dispute can save time and money. Depending on the stipulations in the contract, legal fees can be recovered by the prevailing party. A legal professional will know how to expertly navigate the incident while minimizing the impact on your business no matter which type of violation occurs.