When Does a Breach of Contract Happen?

When Does a Breach of Contract Happen?

Contracts are all around us. They are the legal documents that govern all sorts of interactions. These documents can be used for cell phone service, a home mortgage and even high-stakes business deals. There's no doubt about it, you've likely been the party to a contract at some point of your life. But what happens when a contract goes sideways? What if one party decides not to honor their side of the deal? Well, this situation is referred to as a breach. Learn about the legal significance of a contract breach and how it plays a role in contract litigation.

First Things First

There are a few things a court must look at before it can examine a claim of breach. First, the plaintiff must prove that a valid contract is in existence. This contract must also specifically state what is required of the parties. The court will also need to consider whether the agreement was altered, or modified, at any point in the performance.

Once the court is satisfied that a legal contract was created, there are a couple more considerations. At this stage, the court must determine when and how the alleged breach occurred. It must also look at whether the defendant committed a material breach, and whether there are any suitable defenses. Finally, the court will analyze the claim for damages. Generally speaking, this is what a breach of contract case looks like in business law.

Minor and Material Breaches

As alluded to above, not all breaches work the same. A minor breach is one where the complaining party still receives the overall benefit of the contract. For example, picture a contract to deliver goods where the delivery arrives a few days late. Aside from other language included in the contract preparation, this type of act would be considered a minor breach. In such a scenario, the person buying the goods or service is still obligated to perform under the contract. This would include paying any money due under the contract. The buyer's only recourse is to sue the seller later for any losses that ensued.

The chain of events in a material breach is much different. As you might guess, a material breach is one that affects the very heart of the deal. This happens when one party gets something totally different than what they contracted for. What makes a material breach different from a minor one is that the aggrieved person can stop his or her own performance and immediately sue. Nonetheless, there are many factors that have to weigh in one's favor in order to prove a material breach. If you feel this has occurred to you, it is best to consult an experienced lawyer who handles contract litigation.

You Need an Attorney for a Contract Dispute

The laws regulating contracts are not as simple as they seem. It is a good idea to work with an experienced lawyer who is familiar with business contracts. In Utah, contact Spencer & Jensen, PLLC for assistance.

Tags: business contract, contracts, contract lawsuit

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