A contract is a legally binding agreement and a breach of contract is a broken promise that often results in harsh financial consequences. To protect themselves from damaging contract breaches, individuals and businesses should consult with a Miami business attorney when drafting a contract. If contract disputes arise due to a breach, a good preliminary step is to understand the types of contract breaches.
- Anticipatory Breach — Occurs when it is discovered in advance that the breaching party will not fulfill their side of the agreement on the due date or during the completion of the contract’s terms. In such cases, the non-breaching party can cancel the contract and seek damages before the breach happens.
- Minor Breach — Also called a partial or immaterial breach, occurs when the breaching party failed to perform part of the promised task; the task was performed incompletely or not to the contract’s specifications. In this case, the innocent party can sue for damages, but not for contract cancellation or specific performance.
- Material Breach — Occurs when the breaching party fails to perform the task they were contractually obligated to do. In such cases, the injured party may no longer be obligated to fulfill their side of the agreement and can sue for damages and specific performance.
- Fundamental Breach — Occurs when the breach of contract is substantial. The breaching party failed to complete a fundamental term of the contract and, as a result, the other party was unable to fulfill their own obligations. The injured party is entitled to damages, specific performance, and contract termination.
Once a breach of contract occurs (or is expected to occur), a Miami business attorney experienced at handling contract disputes should be consulted. He or she can protect the rights of individuals and businesses, and ensure they are awarded appropriate remedies. In most cases, victims of contract breaches are awarded monetary damages, but sometimes equitable remedies are also available to them. Types of recoverable damages, include:
- Expectation Damages — Rewarded to victims of anticipatory breaches, they are intended to cover what the injured party expected to get out of the contract. Calculated based on the contract itself or market values.
- Consequential Damages — Rewarded to victims of actual breaches, they are intended to compensate the innocent party of the financial injuries, such as profit losses, directly resulting from the breach of contract. These damages must have been reasonably foreseeable to all involved parties when they signed the contract.
- Specific Performance — A court decree requiring the breaching party to finish or properly perform their contractual obligations.
- Contract Rescission — Court order for the breached contract to be cancelled. A new contract may be drafted.
- Contract Reformation — The court instructs the former contract to be rewritten to better meet the parties’ needs, reflect their true intent, and resolve any previous misunderstandings.
Whether you are the plaintiff or defendant in a contract dispute arriving from a breach of contract, speak with a Miami business attorney at Graham Legal. Call us today for a free consultation.