Contracts are important for many dealings and a breach of contract can cause harm to one or both parties. There are many different ways a contract can be broken, and the way these breaches are resolved can vary, too. Often, the nature of the breach is important to determine how reparations will be made, so it is important to consider common disputes. Breach of contract disputes typically fall into four categories:
- Anticipatory breach
- Actual breach
- Minor breach
- Material breach
An anticipatory breach occurs when one party in a contract announces that they do not intend to meet the terms of the contract. This must be done in advance of the due date for the performance, but after the parties have entered into an agreement. Anticipatory breaches can waste time and money, and the non-breaching party typically has the right to take action for damages when the breach is announced.
Just as the name implies, this type of breach occurs when a party fails to meet the terms of the contract by the due date. The job may not be completed, or may not have even been started, before the due date. If a party refuses to uphold their part of the deal, the other party is entitled to damages for the financial or material loss due to the breach.
These breaches are less serious in nature, and involve a small issue. This can be something like meeting the terms of the contract the morning after it is due. Typically, a reasonable delay is only considered a minor breach, so long as all other parts of the contract are met. Contracts that state that time is of the essence or that there is a tight deadline can increase the severity of the breach to an actual breach. Typically though, breaches of this nature are considered minor, and the non-breaching party may be able to recover minimal damages or none at all.
A material breach occurs when the end result or product is vastly significant than the contract. This can occur when a design contract results in a product that is not what was requested, or when a delivery of a specific type of goods is actually another type or is a different quantity than outlined in the contract. These types of breaches have nothing to do with deadlines, but rather the product or service that was contracted.
Remedies for Breaches of Contract
The type of remedy that will be ordered by the court will depend on the type of breach and the severity of the breach. Remedies may come in two main forms: monetary damages and specific performance.
The most common remedy, damages are payment in one form or another to compensate the non-breaching party for their losses. There are several kinds of damages, such as:
- Compensatory damages: Damages that put the non-breaching party in the same position they were before the contract.
- Punitive damages: Payments that are beyond compensation the breaching party would normally pay to punish the wrongful party for their acts. These are very rare, unless the case overlaps with another area, such as fraud.
- Nominal damages: Token damages when a breach occurred, but there was no actual financial injury proven.
- Liquidated damages: Specific damages that were previously identified in the contract itself by the parties. These are outlined in case the contract is breached. These damages should be a reasonable estimate of the damages that may result from a breach.
When monetary damages are not adequate enough as a legal remedy, specific performance may be ordered. The breaching party will be ordered to complete the duty laid out in the contract. This is the most common remedy when the contract was for a unique or rare subject, and the non-breaching party cannot be placed back in the same position they would have been in had the breach not occurred.
Find Help from Memphis Employment Law Attorneys
Contracts can be crucial for those who are relying on what they promise, and a breach can be financially or personally devastating. At Donati Law, PLLC, we have spent the last 30 years fighting for the rights of people who have been wronged by broken promises. Supported by more than a century of collective experience, our Memphis employment lawyers can help you fight for your rights and receive restitution for your breached contract.
We believe that open communication and approaching each case with a fresh outlook is critical to maximizing our chances of success. Your trust is important to us, which is why we will take the time to talk about your case with you and keep you up to date as your case progresses. We are passionate about what we do, so it is important to us to offer personalized, caring, and driven legal services to every client.
Contact Donati Law, PLLC today. Call (901) 209-5500 to schedule a consultation.