Contracts are not only an important part of business, but of life.
We sign contracts on a daily basis when we purchase a home, buy a car, take out school loans, enter into a marriage, even at our doctor’s appointments! Contracts not only protect the interests of those we choose to engage with, but our interests, as well. So, it would only make sense that contracts are a top priority in business – to ensure and uphold the integrity of your professional rights.
But entering into a contractual agreement, does not always guarantee that everyone will play by the rules. Sometimes, a breach of contract might occur. A breach of contract happens when one or more parties fails to honor their obligations under the binding agreement. If this occurs, the party or parties wronged by the breach have the right to recover compensation for losses due to the non-compliance.
First, you must know whether or not a valid contract exists before you can legally enforce one. Certain elements must be present in order to create a binding contract. These elements include:
So with that in mind, it is understandable that when one party does not uphold their side of the agreement, the other party (or parties) will likely suffer damages, whether financial or otherwise. Something isn’t getting done; someone isn’t getting what was promised to them. The harmed person (or persons) are thereby entitled to compensation or other remedies to recover their losses per the now broken contract—because while the formation of the contract was agreed to, the fracture of the same was one-sided (or benefiting only the offending party when both or all parties were previously assured a benefit).
There are specific business contracts that ensures that the named parties uphold specific obligations to one another. If one party fails to fulfill the agreement, does not perform their duties in accordance with the agreement, or does not fulfill the agreement according to schedule, a breach has occurred. In essence, a breach of contract is a failure, without legal excuse, to perform any promise that forms all or part of the contractual agreement.
Breach of contract actions can take various forms, including breach of purchase and sale agreements, shareholder disputes, breach of partnership agreements, disputes among members of limited liability companies, commercial lease disputes, breach of promissory notes, breach of warranty actions, breach of employment agreements, breach of attorney-client fee agreements, breach of non-compete agreements, and general commercial litigation.
A contract is a binding agreement. When two people or entities enter into a contract, there is a certain level
of trust that accompanies it—both parties are expected to perform according to the terms of the legal
promise. When one or both parties fails to fulfill a part or all of the contractual obligations, he or she (or
they, when multiple parties are involved), have broken that trust and are now in breach of the contract.
There are four types of contract breaches that are recognized by law:
A minor or partial breach of contract involves a party’s failure to satisfy or perform a part of the contract even though ultimately other parts—or the bulk/essence of the contract—are rendered. It’s merely a slight detour from one specification or accompanying requirement of the original agreement. But otherwise, the overall request/promise/service/etc. has been fulfilled.
When one party significantly deviates from the terms of the contract, this is called a material breach. The other party might end up with something completely different than what was promised. This typically means that the injured party is no longer obligated to uphold their side of the contract.
Several factors must be present when determining if a breach of contract is a material breach. These factors include:
This type of breach is fairly self-explanatory. A fundamental or actual breach of contract is a flat refusal by one or more parties to a contract to fulfill their obligations per that contract.
An anticipatory breach is a realization of an impending or future breach of contract. The party that is not expected to offend can terminate the contract before it is breached or sue for enforcement of the contract that is intended to be breached. This intent to breach is sometimes communicated. But other times, it is simply inferred.
Breach of contract remedies can be both monetary and equitable. An experienced business litigation attorney will know what remedies might be available to the injured party—and therefore, what to ask for—after a thorough review of the breached contract.
Monetary damages include compensation to make the injured party “whole.” In other words, this type of monetary relief benefits the non-offending party similar to the way he or she would have benefited had the contract breach not happened. Compensation is not restricted to actual damages, though. Consequential or indirect damages—resulting due to the offending party’s failure to perform his or her contractual obligations—can also be compensated.
Sometimes, a contract might allow for liquidated damages or a provision that provides a specified or predetermined amount of monetary relief that can be awarded to an injured party should a breach of contract occur. These damages are only applicable when not grossly disproportionate to actual damages that can be ascertained.
Lastly, a grieved party may have an option to request reimbursement of attorney’s fees and costs where the contract allows for the same in anticipation of potential necessary litigation.
Equitable damages provide relief that is non-compensatory. This type of relief is usually made by the
issuance of an order of law that requires a person or company to act or refrain from acting in a certain way.
Specific performance calls a party to act while recission voids the contract, excusing both sides from acting.
Specific performance is generally ordered when monetary relief alone will not succeed in making the
injured party whole. Recission is typically granted along with a reimbursement of monetary damages or
monies paid.
An injunction is another type of court order that restrains a party from committing certain acts. This type of
equitable relief may be applicable when stopping a party from acting unlawfully or from doing something he
or she promised not to do per the contract. An injunction might also apply when one party is interfering with
another party’s ability to fulfill his or her contractual obligations.
A fiduciary duty is one person’s obligation to another with or without a tangible contractual duty. This burden of responsibility is extended when the scope of two people’s relationship involves a certain level of trust arising from the dependence of one on the other for a certain benefit or the solicitation of advice.
Familiar relationships where a fiduciary duty applies include attorney-client, doctor-patient, trustee-beneficiary, etc. In business, examples might include partner-partner, corporate office-shareholder or agent-principal.
These relationships and applicable duties might be outlined in contract, statute or simply implied in law. The idea is that one party is relying on another party to act based on his or her best interests thereby necessitating a certain level of trust and confidence. Therefore, there is a duty of loyalty, care and good faith. And a breach of these duties can result in remedies similar to or even greater than those provided in a traditional breach of contract claim.
When a breach of contract occurs, it’s important to give the offending party an opportunity to rectify the problem. But when efforts to go it alone fail, you will likely need to hire an experienced Breach of Contract Lawyer to resolve the contract dispute for you.
Contract law is complex and can be tricky for some. But for those who have made it their life’s work—like the business litigation attorneys at Taylor Martino—it’s just another day at the office (or in the courtroom). Our breach of contract lawyers can get you the outcome you desire in the most efficient and thereby least costly manner.
A breach of contract is like a breach of trust. But you can trust us to achieve satisfactory results so you can get back to business. Sometimes, it might be something as small as miscommunication. Our breach of contract attorneys can get to the bottom of the fall-out and secure you the needed remedies to make you whole again. And we will take on that burden on a contingency-fee basis—meaning you don’t pay unless we achieve a “win.”
Having an experienced business litigation lawyer evaluate your breach of contract claim is imperative because not all breaches actually invalidate the contract. An Alabama breach of contract lawyer can address your concerns and help you with your case.. We offer a free consultation to help evaluate your options, so you can decide the right course of action for you, your business, and/or your current and future business interests.
Contact us at 251-433-3131 or here on our website to get started.
It can be stressful process facing a complex business dispute on your own. The Contingency Business Litigation Lawyers at Taylor Martino have the resources to litigate against the largest businesses and organizations. Operating on a contingency basis, means that we have a strong incentive to obtain the greatest recovery possible for our clients without draining valuable earnings and assets to obtain the results they deserve.
CONSULT WITH A CONTINGENCY BUSINESS LITIGATION ATTORNEY TO LEARN MORE ABOUT STRATEGIES, PROCESS, AND PROCEDURES SUCCESSFULLY HANDLING COMPLEX BUSINESS LITIGATION DISPUTES.
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