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How to identify the main breaches of contracts

On Behalf of | Feb 10, 2023 | Business Litigation

Contracts are legally binding documents that require remedies if one party violates the terms. This is a breach of contract, and the first step to remediation is identifying these types that can occur.

Although contracts come in many forms, there are only a few breaches. Here is more on the main types of violations and how to identify them.

Material breaches

Material breaches occur when one party receives fewer benefits or results than anticipated. Businesses can identify these because one party often fails to uphold its duties or does not meet obligations on time. When this occurs, the other party can demand compensation for their losses due to the breach.

Minor breaches

A minor breach occurred when the terms of the conditions were ultimately met with the deliverable, but the contract was not upheld elsewhere. If the wronged party can prove that they faced financial consequences, they may be able to receive compensation. That said, if the wronged party cannot prove financial losses, they may not be able to seek a remedy.

Actual breaches

An actual breach has already occurred, meaning one party did not meet the terms by the due date, or they did them incorrectly. These are easy to identify and seek remedies for. Typically, that includes financial compensation for any damages related to the breach.

Businesses cannot control the other party’s actions when entering a contract, so there will always be a risk. However, they can take steps to mitigate this risk. One of the best ways to do this is to draft a favorable contract for everyone involved, encouraging everyone to uphold their end of the deal.