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Dealing with Breach of Contract Issues
One of the most common legal tools that businesses use is contracts. A contract is a legally binding agreement that can be made between the company’s partners, between the company and employees, the company and clients, and the company and suppliers. If one party fails to fulfill its obligations as stipulated in the contract, this is referred to as a breach of contract. A breach of contract can occur if one party fails to pay for services or goods, failed to meet a deadline, or delivers substandard work. A breach of contract can cause significant financial loss for a company and often leads to lawsuits.
Types of Contract Breaches
There are two types of breaches of contract: material and immaterial. A material breach is a significant violation of the terms of the contract and one that goes to its core. This can include failing to deliver goods or services in their entirety or delivering goods or services that are significantly different from what was agreed upon.
An immaterial breach is considered a minor violation of the contract that does not substantially affect the contract’s overall purpose.
Remedies to Breach of Contracts
When a breach of contract occurs, the first step is usually to attempt to resolve the issue through negotiation or mediation. If this is unsuccessful, legal action may be necessary. The party that has been harmed by the breach can seek damages for the losses they have incurred, including lost profits, the cost of finding a replacement, and other expenses that are a result of the breach.
In some cases, the court may order what is referred to as “specific performance,” requiring the breaching party to fulfill their obligations under the contract. This is usually done if there are no other adequate remedies available in the form of damages. An example of when specific performance could be ordered includes when the product promised was unique and not available anywhere else.
Avoiding Breach of Contract
In order to avoid finding your company in a breach of contract situation, it is important to ensure that the terms of the contract are clear and unambiguous and that all parties fully understand their obligations. It is also important to keep all detailed records of communication, agreements, payments, and any other documentation that can be used as evidence in the event of a breach.
Contact a Fort Lauderdale, FL Business Lawyer
One of the most critical safeguards in protecting your company in any business contract is having a skilled Broward County business attorney representing you. If you are considering entering into a contract or are having issues with an existing one, call The Elliot Legal Group, P.A. at 754-332-2101 to schedule a confidential consultation and find out how we can help.
http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0672/0672.html
https://www.law.cornell.edu/wex/specific_performance
