Protecting The Best Interests Of Commercial Clients In The Construction Field And Other Industries

4 different ways a contract can be viewed

On Behalf of | Sep 3, 2023 | Business Law |

Contractual agreements are common among businesses and other parties. By ensuring that contracting parties are aware of their legal obligations, well-written contracts can be advantageous to all parties.

Unfortunately, contract violations do happen and can be troublesome. Here’s what you should know about contract breaches:

Non-material breaches may not be much cause for concern

Anything that very marginally violates a contract may be considered a minor or “non-material” breach. Usually, this kind of issue doesn’t result in much damage to non-breaching parties. But, the non-breaching parties may still be upset by the breach.

A minor breach, for instance, would occur if one of the parties neglected to ship wood for a building by the deadline instructed in a contract. The delivery may be delayed by a day, but not cause any financial issues if the delay doesn’t cause problems or delays with the construction.

Material breaches can cause significant losses and upset

When a good or service wasn’t provided or completed by the terms of a contract, that could constitute a material breach. Damages from this kind of breach may be rather severe.

Returning to the previous example, there could have been a shipment of wood intended for use in a house. The non-breaching party examined the wood and found that the wood was the wrong grade, rendering it unsafe for construction purposes. The wood shipment may then cause delays in the construction of a home and cause financial losses to the non-breaching party.

Actual breaches are breaches that have already happened 

An actual breach happens when a non-breaching party discovers that the other party didn’t fulfill their end of a contract. This typically is discovered by the non-breaching party at some point after the contract was supposed to be fulfilled.

Anticipatory breaches can sometimes be averted

Sometimes, one party to a contract may realize that they can’t (or won’t) fulfill their end of a bargain. They may notify the non-breaching party out of obligation, courtesy and an attempt to mitigate the potential damages. Sometimes, it’s also possible to renegotiate a contract’s terms when this happens and avoid losses on either side.

When a breach of contract has happened or is expected, it may help to learn more about your legal options.