Breach of Contract

Contracts form the basis of your business and its operations. You or your company may contract with suppliers of raw materials, parts manufacturers, or others to supply your business with the raw materials, and equipment it needs to carry out its operations. Furthermore when you hire an employee, you are agreeing to a contractual employment relationship. While a properly bargained-for and executed contract is backed by the force of law, contract still operate on the basis of trust and practibility. When either or both of these factors are not present, deals break down and your business is left in a difficult situation of attempting to mitigate the situation.

Material and nonmaterial breaches of contract introduce uncertainty into your operations. They can delay production and delivery or prevent the performance of a particularized goal entirely. In short, when another company breaches a contract, cost are shifted on o your business. Likewise, if your business is forced to breach a contract, the non-breaching party is likely to seek damages. In either case, an experienced attorney can protect your business’ interests and its bottom-line.

What Is a Breach of Contract?

A breach simply means that one party has failed to satisfy some aspect of the deal that was bargained for and agreed to. Depending on the circumstances, the breach can involve a failure to perform a certain action or an affirmative act such as:

  • The failure to make delivery at a contractually specified location.
  • The failure deliver goods that conform to specifications.
  • The failure to provide the quantity that was bargained for.
  • Making statements that would cause the other party to anticipate a breach.
  • Failure to pay for the goods or services provided.
  • Requesting last minute changes that would render the deal economically unfeasible.
  • Failure to respect “time is of the essence” clauses.
  • One party repudiates all or some terms of the contract

The circumstances where a breach can occur is limited only by the types of things that can be contracted for. Furthermore, the amount and type of damages that may be at issue following a breach are based on the language recorded in the contract. An experienced lawyer can protect your business’ essential interests through careful contractual drafting.

What Types of Relief May Be Available Following a Breach?

Following a breach, the non-breaching party will often seek damages. In some cases these damages can be negotiated for informally without resorting to litigation. However in other circumstances, your business may have to litigate to protect its interests. When a breach of contract is litigated, the damages that are available are dependent on the contract, whether the breach was material, and a host of other factors. However, damages that are commonly available in these types of situations can include:

  • Consequential damages – Consequential damages are concerned with putting the non-breaching party into the same position it would have been but for the breach. Compensatory damages can cover the difference in cost between the original price and the new price when finding a replacement for a bargained-for part or service.
  • Liquidated damages – Liquidated damages are damages that are negotiated and bargained for as part of the contractual drafting process. This type of damages is written into the contract for when a breach occurs.
  • Nominal damages – Nominal damages is a small award that is typically granted when a party did breach the contract, but the consequences of the breach were slight.
  • Punitive damages – Punitive damages are probably the least common form of damages for a breach of contract. Damages of this type is typically reserved for particularly wrongful or egregious behavior. These damages are sometimes described as “sending a message.”
  • Rescission – Rescission, like its related word rescind, simply means that all or part of the contract is rescinded and treated by the court as if it did not exist. Recession unwinds the transaction by the parties and attempts to return them to a state that is as close as possible to before they entered into the contract.
  • Specific performance – In civil matters, courts are typically reluctant to order a business or individual to do or to not do something. However, in unique circumstances – such as where a replacement cannot compensate or replace the bargained-for good or service – a court will order one party to complete performance of the contract.

The particular relief that may be available or in question is specific and particularized to your matter. An attorney cannot state the types of relief your business may be entitled to without first reviewing the contract, facts, and circumstances present in your matter.

Rely On A Contract Litigation Attorney

The attorneys of Meredith & Narine are committed to providing high-quality representation in drafting, administering, and litigating contractual matters. If a business or individual has breached its obligations owed, contact our experienced team of attorneys. To discuss how our firm can assist your business with its contractual concerns, call us at (215) 995-2769 or contact us online for a confidential consultation.

 

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