Breach of Contract

Breach of contract occurs when a party that is subject to a binding agreement fails to honor the agreement due to non-performance or by interfering with another party’s performance. There are four basic types of breach of contract:

1. Minor breach

Also known as a partial breach or an immaterial breach, a minor breach occurs when a non-breaching party is only entitled to collect the amount of their damages caused by the breach. For example, if a client instructs a contractor to use a certain brand of concrete and the contractor uses another brand, the breach would be considered minor if the concrete costs less but has the same quality. The client can recover the cost difference, but cannot compel the contractor to redo the project.

2. Material breach

A material breach occurs when a non-breaching party is entitled to either enforce an order for performance or collect the amount of their damages caused by the breach. For example, if a contractor fails to complete a concrete project, the client can compel the contractor to complete the job or pursue damages related to the project’s incompletion.

3. Fundamental breach

Also known as a repudiatory breach, a fundamental breach is a breach that is so egregious that it permits a non-breaching party to terminate the contract as well as sue the breaching party for damages. For example, if a contractor performs a concrete project in a way that causes property damage, the client can terminate the contract and collect damages related to the property damage.

4. Anticipatory breach

An anticipatory breach occurs when a party to the contract indicates that they will not perform when performance is due, which permits a non-breaching party to treat the breach as being immediate. The non-breaching party can terminate the contract as well as sue the breaching party for damages.

When breach of contract is successfully pursued in court, the non-breaching party usually receives monetary damages. To determine whether a violated contract constitutes a legal breach of contract, it is helpful to speak with an attorney. After examining your case, your attorney will help you resolve your case by pursuing a settlement or taking your case before the Court.