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Breach of Contract Definition

Legally binding contracts usually involve two or more parties who initiated an agreement. In a legal context, when one or more of the involved parties fails to fulfill any one of the contractual obligations, a breach of the contract has occurred. A breach may have occurred if any party partially or completely neglects to perform their duties in accordance with the terms that were agreed upon in the contract. 

Breach of Contract Example

Legal remedies for a breach vary based on factors that classify the breach, commonly referred to as being either a “material breach” or “immaterial breach”. A fictional example of an immaterial breach would be between John Doe Hospital (JDH), and Medical Supply Company (MSC). The two parties have agreed upon a contract that states MSTL must deliver supplies every Monday morning by a specific time. The supplies to be delivered by MSC are critical and needed for normal operations at JDH. 

When MSC makes a late delivery to JDH, on the following Tuesday, the breach would likely be deemed material as it regards a failure on behalf of MSC to meet strict predetermined time agreements for deliveries. Given that the terms of the agreement stated strict time restrictions for deliveries, the breach committed by MSC would likely make them liable for damages to JDH.

Remedies & Resolution Options

Given that a breach of contract has occurred or is suspected to have occurred, either party may act to enforce terms stated in the contract by recovering damages that were a result of the breach.

Usually the first method of resolving a breach of contract dispute is informal, but if informal attempts at resolution fail, either party may pursue legal action in the form of a lawsuit. Depending on the dollar amount, the dispute may be resolved in local small claims court. 

Out-Of-Court Remedies

There are two methods that resolution can be reached outside of court, mediation and arbitration. Involved parties can either agree to having a mediator review the dispute in order to reach a resolution. Alternatively, either party could potentially decide to submit the dispute to a neutral party that would review the case and arrive at a decision, known as binding arbitration.

Legal Remedies for Breach of Contract

By law, when one party is found to have breached a contract, the other party is entitled to relief in the form of:

• Specific performance, when the offending party is required to perform a specific duty, such as completing the duties stated in the contract.
• Cancellation & restitution of the contract
• Payment of specific damages that were a result of the breach requiring the offending party to perform a specific act, such as to complete performance requirements stated in the original contract.

Legal Assistance for Breach of Contract Disputes

In the event that you suspect you have breached a contract or are named in a contract that you believe was breached by another party named in the contract, it may be in your best interest to consult with a law firm that specializes in breach of contract disputes. By first consulting with an attorney in your area, you will be able to make a well-informed decision about what to do next. Your attorney will be able to advise you on the best course of action for your unique situation.