Contracts are at the heart of every transaction. They are legal tools used to protect the rights of all parties. Generally, parties to a contract honor their obligations until the contract is fulfilled. Nonetheless, this isn’t always what happens.
Contracts can be breached, and when this happens, the wronged party can seek damages. Usually, the aim of the courts in litigation relating to contract breaches is to make the wronged party “whole again”. In other words, put them in a situation as if the breach had not occurred. In what ways can a contract be breached?
Minor breaches
Technically, any contract that has not been followed to the letter has been breached. However, breaches range from minor to severe. For example, a minor breach may occur when one item in a large order has been damaged. Often, these types of breaches can be remedied without litigation. For instance, the sender could quickly ship out a replacement for the damaged item. Then, the wronged party would be made whole again.
Anticipatory breaches
In some cases, the wronged party may be made aware of the breach before it actually happens. This is called an anticipatory breach of contract. For instance, if a vendor informs the receiver that the goods will arrive a day later than expressed in the contract, this is an anticipatory breach.
The situation above would most likely be remedied by offering an apology and an assurance that all future deliveries will arrive on time. However, remedying an anticipatory breach will depend on how serious the breach is.
Actual and material breaches
Actual and material breaches are the most serious types of contract breaches. These occur when the terms of the contract have not come close to being honored. For instance, a contractor may simply not have performed any of the work that they had promised to do.
While there are different ways to remedy actual and material breaches, compensatory damages is the most common remedy. The wronged party can receive financial damages for the losses suffered as a result of the breach. In some cases, it may be possible to use a specific performance remedy. This would order the contractor to complete the work that they agreed to do.
When dealing with a serious contract breach, you may need to seek legal guidance to get the best remedy for your circumstances.
