Contracts govern every aspect of businesses. Owners, employees and customers all have contractual rights and obligations. For the most part, this helps with efficiency and prevents disputes, but that isn’t always the case.
Contracts can be breached in several ways. Outlined below are the most common types of contract breaches.
Minor breaches
Sometimes, contract breaches are minor. What this means is that they do not divert significantly from the original agreement. For instance, if a supplier is a day late on delivery, this would be a minor breach. Generally, both parties can continue working together and the matter may be resolved with an apology or small discount.
Anticipatory breaches
Often, one party is not aware of the breach until after it has occurred. However, this is not always the case. There may be occasions where the breaching party provides an advanced warning that they will not be able to fulfill their obligations. This is called an anticipatory breach.
For example, If an independent contractor has contractually agreed to come in on a certain date, and informs the business that this will no longer be happening, this is an anticipatory breach. Resolving these types of breaches will largely depend on the specific circumstances. Both parties may agree on new terms, or the original agreement may be rescinded and the affected parties awarded with damages.
Actual and material breaches
Actual and material breaches completely divert from the terms of the original agreement. An example would be when one party receives goods that are of a completely different specification to what was agreed upon. Again, remedying this type of breach will largely depend on specific circumstances, but an award in damages is often the end result.
If you’re dealing with a contract breach, it’s important to seek legal guidance to help ensure that your rights are upheld.