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Malcolm Zoppi Wed May 08 2024

Navigating Breach of Contract Cases: Strategies and Outcomes

What happens when a contract is broken, and what can you do about it? Breach of contract cases arise when obligations are not met, creating legal disputes and potential damages. This comprehensive guide will help you understand what constitutes a breach, examine its consequences, and discover the legal actions you can take to address it—all […]

What happens when a contract is broken, and what can you do about it? Breach of contract cases arise when obligations are not met, creating legal disputes and potential damages. This comprehensive guide will help you understand what constitutes a breach, examine its consequences, and discover the legal actions you can take to address it—all aimed at equipping you with the tools to handle or prevent these legal challenges.

Key Takeaways

A breach of contract occurs when a party fails to fulfill their obligations under the agreement, and identifying a valid contract involving agreement, intention, and consideration is critical before determining a breach.

Various types of breaches exist, including material, anticipatory, and minor breaches, each with distinct implications for legal action, and the impact of a breach must be assessed to decide on the appropriate remedy.

Legal remedies for breaches include monetary damages, equitable remedies such as specific performance and injunctions, and alternative dispute resolution methods like mediation and arbitration to settle disputes efficiently.

Recognizing a Breach of Contract

A breach of contract may manifest in various ways, ranging from an outright refusal to provide goods to more nuanced non-compliance with the stipulated terms. At its core, it occurs when one party fails to abide by the agreement’s conditions, often due to not meeting their responsibilities. Detecting indications of a breach is crucial for taking appropriate action. This includes recognizing unmet commitments or lapses in fulfilling duties. Before exploring the particulars of a breach, it is essential first to have a comprehensive grasp on what constitutes a valid contract — which forms the basis for such disputes.

Developing an understanding of the different categories of contractual breaches and learning how assess their impact are imperative steps. These elements will be Examined in forthcoming sections.

Identifying a Valid Contract

In essence, a contract is an agreement between two or more entities. Not every agreement rises to the level of a legally binding contract . A valid and enforceable legal contract comes into existence when three fundamental elements are present – this marks the point at which a contract occurs.

Agreement: This involves a clear offer and acceptance by the parties involved.

Intention: There must be mutual intention toward forming legal obligations.

Consideration: Value must be exchanged in some form—be it money, goods, services or even an abstention from acting.

It is these core components that make up a legally sound contract.

While contracts can exist in both oral and written forms—and are equally obligatory given they incorporate these essential elements—the proof of such agreements differs significantly between them. Illustrating the terms within a written document tends to simplify matters greatly compared to its verbal counterpart because it provides tangible evidence of all conditions agreed upon by parties concerned including legality capacity as well as consideration thus while pinpointing what constitutes as enforceable may appear simple on face value determining validity can necessitate rigorous evaluation often requiring specialized understanding within law circles.

Types of Breaches

Similarly to the variety of contracts that exist, breaches also come in different forms with distinct consequences and legal ramifications. In a material breach scenario, such as what unfolded in Farley v. Skinner, the agreement’s value is notably undermined due to one party failing to deliver critical information needed by another for property enjoyment. This type of severe violation permits the aggrieved party not only to end the contract but also to seek compensation through litigation because a material breach occurred.

Conversely, an anticipatory breach arises when it becomes evident that one member involved will fall short on fulfilling their commitments before they are scheduled to do so – giving rise immediately and legally protectable options for remedy or reparation. The case Hochster v De La Tour exemplifies this situation where an early claim was upheld by court judgments recognizing anticipatory contractual violations.

Lastly, are less significant infractions which may not result in direct cancellation of agreements. They can justify claims for damages, especially if they cumulatively amount up enough severity equivalent or close to those seen in full-fledged material infringements — all vital knowledge which could be crucially important when dealing with various instances where obligations outlined within contracts have been dishonored by any breaching entity involved.

Assessing the Impact of a Breach

The consequences for the innocent party in a breach of contract can vary widely, depending heavily on both the terms outlined within that contract and the exact nature of the failure to adhere to those terms. The essential goal following such an incident is to ensure that this non-breaching party is made whole again economically, essentially placed back into the position they would have been in had there never been any violation.

On another note, it’s intriguing to consider situations where breaching a contract might not result in detriment but instead could be beneficial. This concept known as Kaldor-Hicks Efficiency suggests certain conditions under which violating a contractual agreement may actually lead to more advantageous results for all involved parties and even potentially enhance societal welfare overall. Take, for example, if market prices suddenly surged, prompting a farmer who was contracted with a winery for grapes to choose instead not to fulfill their commitment. Surprisingly, this could end up being more lucrative collectively than sticking strictly by their initial agreement. Assessing breaches requires careful consideration of what specific circumstances are at play and how these events may unfold impactfully.

Legal Remedies for Breach of Contract

When a party defaults on their contractual obligations, it is crucial to comprehend the array of legal options at one’s disposal. These options range from pursuing monetary compensation and canceling the contract to seeking judicial mandates such as injunctions or orders for specific performance, all designed to safeguard the interests of the party not at fault. The selection and intensity of these remedial measures are closely tied to what kind of breach occurred – whether significant (material), anticipated before performance is due (anticipatory), or trivial.

Specifically talking about damages, they serve as a fundamental remedy in cases where there has been a violation of contractual terms, with an aim that financially places the aggrieved party back into the position projected if no default had ever happened. Nevertheless, circumstances arise wherein mere financial reparations do not fully redress incurred losses. It’s within this context that equitable remedies shine along with alternative dispute resolution techniques—avenues we will delve into in more depth moving forward.

Monetary Damages

Financial compensation is the prevalent recourse for a breach of contract, intended to reimburse the non-breaching party for economic losses sustained due to the breach. The central aim in awarding damages in cases involving contract breaches is to restore the aggrieved party financially as though there had been no breach at all.

There are various categories of damages, such as nominal damages that offer token acknowledgment of a breach without an actual monetary loss and substantial damages given when there’s measurable financial harm caused by the breaching party. Both the nature and magnitude of these compensations hinge on particular details surrounding each instance of contractual violation and how severe the consequent financial damage has been.

Equitable Remedies

In breach of contract situations, financial compensation may not always suffice to rectify the loss incurred. As a result, equitable remedies are employed as legal resolutions that courts can dispense when monetary damages fall short. Equitable remedies encompass measures like specific performance and injunctions.

When it comes to compelling adherence to contractual terms, particularly concerning distinctive goods or circumstances where other types of reparation would prove inadequate, courts often mandate specific performance. In contrast, injunctions serve as court-mandated orders either restraining a party from executing particular acts or obligating them to take action. In contract cases involving breaches where mere financial compensation is insufficient for redress, equitable remedies become crucial by offering solutions that more accurately remedy the harm resulting from such breaches.

Alternative Dispute Resolution

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Given the potential drawbacks of lengthy, expensive, and tension-filled court cases, a significant number of companies turn to Alternative Dispute Resolution (ADR) as their go-to for settling disagreements. ADR strategies such as mediation and arbitration provide a more expedient and economical solution compared to traditional litigation.

In the case of mediation, parties engage with an impartial third party—the mediator—who helps them negotiate a settlement without making any formal judgment. Conversely, arbitration resembles an informal courtroom setting where after reviewing all presented evidence and arguments from both sides, the arbitrator hands down an enforceable verdict. Regardless of which route is taken within ADR mechanisms, these approaches offer practical means for effectively addressing breach of contract disputes while promoting harmony between disputing parties.

Building a Strong Contract Claim

Creating a robust contract claim is essential in the event of a breach to ensure you receive appropriate compensation or remedies. The process includes compiling evidence, confirming there’s an actual contract, and demonstrating that this contract was violated. Documented exchanges like letters, faxes or emails can be key as they often contain information pertaining to how the contract was formed or specifics about behaviors violating its terms.

Forming a powerful case around your contract claim takes more than just showing that there was indeed a contractual agreement which has been breached. In such cases, consulting with experts may prove extremely beneficial. We will explore what it entails to validate the existence of a binding agreement, identify instances of its infringement and highlight why professional legal counsel plays an important role in these situations.

Proving the Existence of a Contract

To build a persuasive breach of contract claim, it’s necessary to verify the existence of the actual contract. This means evidencing several key components:

an initial offer

acceptance of said offer

mutual consideration

and a shared intention to establish legal obligations.

Typically, evidence for a written contract comes in the form of documents bearing signatures from all involved parties or, depending on certain types of contracts’ legal requirements, satisfying statutory formalities.

Should there be no written proof available, oral accounts can suffice in proving that a contract existed. This is contingent upon how believable those accounts are to the adjudicating judge. Providing distinct and precise terms which correspond with relevant occurrences reinforces verification efforts concerning any alleged agreement—making such validation integral when pursuing a robust case for breach of contractual agreements.

Establishing a Breach

In determining the presence of a contract breach, it is crucial to demonstrate that a party has failed in meeting their contractual obligations. This failure can manifest in various forms, including inadequate workmanship, neglecting to perform agreed-upon duties, delays in payment schedules, or not providing goods or services according to stipulated terms.

Merely identifying failures by the other party isn’t sufficient for establishing a breach. One must also prove that these failings resulted in loss for the non-breaching party. To substantiate this claim, often necessitates the gathering and presentation of supporting evidence such as documentation, exchanges of communication or testimonials from witnesses. Proving contract breaches lies at the heart of building a strong case for any contract claim against the breaching party.

Seeking Legal Advice

It is possible to manage breach of contract cases on one’s own, yet the complexities and legal technicalities involved may be overwhelming. To settle disputes over breaches of contract swiftly and obtain positive outcomes without extended court proceedings, seeking legal counsel is often essential.

Enter companies such as Gaffney Zoppi . They provide dedicated services from experienced contract lawyers with quick response times and competitive, fixed-rate pricing structures – offering an economical legal option for enterprises. Thus, when aiming to construct a robust contract claim or steer through intricate contractual disagreements, the value of professional legal guidance cannot be overstated.

Avoiding Breach of Contract Disputes

Comprehending the nuances of breach of contract cases and mastering their navigation is crucial. It’s always more advantageous to prevent such occurrences. To circumvent disputes related to breaches of contracts, one can employ several tactics: crafting explicit agreements, incorporating clauses that address dispute resolution within those agreements, and seeking guidance from an attorney specializing in contract law .

These methods will be explored more thoroughly in the following sections.

Drafting Clear Contracts

The first step towards avoiding breach of contract disputes is drafting clear contracts. Contracts should lay out rights and obligations explicitly, protecting business interests and forming a strong basis for enforcement in breach scenarios.

Thorough negotiations before finalizing a contract ensure clear and definitive terms and conditions, circumventing ambiguities and setting explicit mutual expectations. Contract lawyers, like those at Gaffney Zoppi, can be instrumental in drafting flexible contracts that can evolve with circumstances and guide parties through contractual adjustments as required.

Negotiating Dispute Resolution Clauses

To circumvent disputes related to breaches of contract, it is critical to include clauses for negotiated dispute resolution within the contractual provisions. These particular clauses delineate a pre-agreed method by which any conflicts or issues that arise throughout the duration of the contract can be resolved.

Include these negotiated dispute resolution clauses in contracts ensures:

Defined methods for managing disagreements outside court proceedings

Stability and foreseeability in conflict management

The flexibility for involved parties to resolve disputes tailored to their specific requirements.

Working with a Contract Lawyer

Consulting a contract attorney is a critical step in preventing disputes arising from breaches of contract. Law firms such as Gaffney Zoppi boast attorneys with specialized knowledge who can offer invaluable guidance on the creation, negotiation, and resolution of contracts. It’s prudent to consult legal professionals for advice to secure an optimal outcome.

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When engaging with Gaffney Zoppi lawyers, clients enjoy numerous advantages.

The firm dedicates time to thoroughly comprehend each client’s business ambitions and challenges which allows them to tailor contracts that meet unique needs.

They are committed to delivering results swiftly.

Their pricing structure is both competitive and transparent, offering fixed rates for their services.

Securing the expertise of a Gaffney Zoppi contract lawyer represents a strategic investment toward averting potential breaches of contract disputes.

Real-Life Breach of Contract Cases

Let’s examine some real-life examples of contract cases that involve an actual breach. By exploring instances of material, anticipatory, and minor breaches, we gain practical understanding into the nature of these violations and the types of legal recourse sought in such events.

Material Breach Example

In a particular instance, there was a material breach when Company A did not fulfill its obligation to supply Company B with a specially ordered piece of machinery. Due to this noncompliance, Company B missed out on an important contract and consequently pursued compensation for their losses.

Similarly, in another scenario, the other party—a software vendor—failed to deliver promised updates and support as stipulated by their agreement. This resulted in interruptions within the client’s business activities and ultimately led them to win a court case that awarded consequential damages stemming from the breach.

Anticipatory Breach Example

An instance of anticipatory breach occurred when a contractor informed the client ahead of time that they would be unable to fulfill their obligation to finish a construction job by the agreed deadline. Consequently, this enabled the client not only to hire an alternative contractor but also to initiate legal action for recovery of any additional expenses incurred.

In a separate notable case involving an anticipatory breach, before fulfilling their contractual obligations at an event, a well-known personality publicly declared their intention not to perform as agreed upon. This led them and the aggrieved party into an agreement which compensated for anticipated losses in ticket revenue and damages related to reputational harm due to party failures. The individual or entity pursuing reparation for such preemptive contract violation successfully obtained what was sought after.

Minor Breach Example

Regarding a minor infraction, an instance involved the tardy delivery of goods that negligibly impacted the business operations of the recipient, leading to a modest compensation for insignificant damages. Herein, the entity on the receiving end is deemed an innocent party. Similarly, another slight breach comprised improper packaging which bore no effect on product integrity. Resolution was achieved via reductions in forthcoming purchases rather than pursuing litigation.

These instances underscore that reactions to contractual violations should correspond with their gravity and resultant damage inflicted.

Delving into the complexities of breach of contract cases can seem overwhelming, but a thorough grasp on contractual principles, varieties of breaches, lawful remedies and preventive strategies for dispute avoidance simplifies the process. This blog entry has served as an exhaustive instructional resource for mastering how to handle breach of contract situations.

In summation, comprehension of your rights and duties within contract law is imperative whether you are an entrepreneur, business proprietor or someone involved in contractual agreements. Keep in mind that sidestepping future issues with contracts is preferable to rectifying them later on. It’s wise to devote effort to crafting transparent contracts, include clauses tailored towards dispute resolution, and perhaps engage with a legal expert specializing in contracts like Gaffney Zoppi for steering clear of possible conflicts ahead.

Frequently Asked Questions

What is a breach of contract.

When one party does not meet their obligations stipulated in the agreement, a breach of contract occurs.

What are the types of breaches in a contract?

When assessing a breach of contract, it is crucial to recognize the key classifications which include material breach, anticipatory breach, and minor breach. These categories serve as the foundational types of breaches in contractual agreements.

What are the legal remedies for a breach of contract?

Should there be a violation of the contractual agreement, legal recourse is available which can include compensation for damages, cancellation of the contract, and obtaining particular judicial directives such as specific performance or injunctions.

This range of remedies offers practical solutions to handle the infringement satisfactorily.

How can breach of contract disputes be avoided?

To prevent disputes arising from contract breaches, concentrate on composing unambiguous agreements, negotiating clauses related to dispute resolution effectively, and consulting with a contract attorney for comprehensive advice and clarity.

What services does Gaffney Zoppi provide?

Zoppi Gaffney provides expert legal advice through their specialized contract lawyer services, catering to an extensive clientele that includes private individuals, entrepreneurs, and business owners. Their expertise spans across multiple legal requirements from the realm of business agreements to the intricacies involved with private equity firms.

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A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach could be anything from a late payment to a more serious violation, such as the failure to deliver a promised asset .

A contract is binding and will hold weight if taken to court. If it can be proved that a contract was breached, the remedy would generally be to give the victim what they were initially promised. A breach of contract is not considered a crime or even a tort , and punitive damages are rarely awarded for failing to perform promised obligations.

Key Takeaways

• A breach of contract occurs when one party in a binding agreement fails to deliver according to the terms of the agreement.
• A breach of contract can happen in both a written contract and an oral contract.
• The parties involved in a breach of contract may resolve the issue among themselves or in a court of law.
• There are different types of contract breaches, including a minor or material breach and an actual or anticipatory breach.
• A breach of contract is not considered a crime or even tort and rarely results in extra monetary compensation.

Understanding a Breach of Contract

A breach of contract is when one party breaks the terms of an agreement between two or more parties. This includes when an obligation that is stated in the contract is not completed on time—for example, you are late with a rent payment—or when it is not fulfilled at all, such as a tenant vacating their apartment while owing six months’ back rent.

Sometimes the process for dealing with a breach of contract is written in the original contract. For example, a contract may state that, in the event of late payment, the offender must pay a $25 fee along with the missed payment. If the consequences for a specific violation are not included in the contract, then the parties involved may settle the situation among themselves, which could lead to a new contract, adjudication , or another type of resolution.

Types of Contract Breaches

One may think of a contract breach as either minor or material.

• Minor breach : A minor breach happens when you don’t receive an item or service by the due date. For example, you bring a suit to your tailor to be custom fit. The tailor promises (an oral contract) that they will deliver the adjusted garment in time for your important presentation but, in fact, they deliver it a day later.
• Material breach : A material breach is when you receive something different from what was stated in the agreement. Say, for example, that your firm contracts with a vendor to deliver 200 copies of a bound manual for an auto industry conference. But when the boxes arrive at the conference site, they contain gardening brochures instead.

Further, a breach of contract generally falls under one of two categories:

• Actual breach : When one party refuses to fully perform the terms of the contract.
• Anticipatory breach : When a party states in advance that they will not be delivering on the terms of the contract.

Legal Issues Concerning a Breach of Contract

A plaintiff, the person who brings a lawsuit to court claiming that there has been a breach of contract, must first establish that a contract existed between the parties. The plaintiff also must demonstrate how the defendant—the one against whom a claim or charge is brought in a court—failed to meet the requirements of the contract.

Is the Contract Valid?

The simplest way to prove that a contract exists is to have a written document that is signed by both parties. It’s also possible to enforce an oral contract , though certain types of agreements still would require a written contract to carry any legal weight. These kinds of contracts include the sale of goods for more than $500, the sale or transfer of land, and contracts that remain in effect for more than one year after the date when the parties sign the agreement.

Courts will review the responsibilities of each party of the contract to determine whether they have fulfilled their obligations. Courts also will examine the contract to see if it contains any modifications that could have triggered the alleged breach. Typically, the plaintiff must notify a defendant that they are in breach of contract before advancing to legal proceedings.

Possible Reasons for the Breach

The court will assess whether or not there was a legal reason for the breach. For example, the defendant might claim that the contract was fraudulent because the plaintiff either misrepresented or concealed material facts.

The defendant could alternatively argue that the contract was signed under duress, adding that the plaintiff compelled them to sign the agreement by applying threats or using physical force. In other cases, there might have been errors made by both the plaintiff and the defendant that contributed to the breach.

To avoid a breach of contract lawsuit, you should check any contract you sign for three things.

• Clarity : The language of the contract should be clear and precise. If the other party is not a native speaker of the language the contract is in, it may be worthwhile to hire an interpreter to ensure that everyone understands their roles and expectations under the contract.
• Expectations : You and any other parties signing the contract should understand the expectations it outlines and already know that you are able to fulfill them. Your ability to meet those expectations should not rely on future amendments because those may not happen.
• Legality : In order to be binding, your contract needs to be legal where it is signed. If you are not sure, work with a lawyer who specializes in contract law before anyone commits to signing.

You can also avoid breach of contract lawsuits by carefully selecting the people or companies that you work with. Take time to research their professional reputations and legal history. If they have previously been involved in breach of contract lawsuits, you may not wish to do business with them.

Generally speaking, the goal of contract law is to ensure that anyone who is wronged is basically left in the same economic position that they would have been in had no breach occurred. A breach of contract is not considered a crime or even a tort, and punitive damages are rarely awarded for failing to perform promised obligations, with payouts limited to the figures listed in the contract.

For example, if you completed a job for which a contract stated you would get paid $50,000, but you only got $20,000, you could be awarded damages of $30,000.

Normally, a party whose contract was breached cannot claim more than the money they were initially owed, as laid out in the contract.

However, the doctrine of reliance damages does offer some exceptions in very specific circumstances. Additional monetary damages may be awarded if it can be proved that a reliance on the contract being fulfilled triggered other connected expenses, such as lifeguard equipment being bought based on the assumption laid out in the contract that a pool would be built.

In such cases, those harmed will be rewarded extra damages only if they did their best to get themselves out of that unfavorable situation—such as, in the example above, by selling the lifeguard equipment.

Economically, the costs and benefits of a contract's terms determine whether either or both parties have an economic incentive to breach it. If the net expected cost to a party of breaching a contract is less than the expected cost of fulfilling it, then that party has an economic incentive to breach the contract. Conversely, if the cost of fulfilling the contract is less than the cost of breaking it, it makes sense to respect it.

Furthermore, when the expected cost to each party of following through with a contract is greater than the expected benefit, both parties have an incentive to forgo the transaction in the first place or mutually agree to void the contract. This may occur when relevant market or other conditions change over the course of the contract. 

Example of a Mutually Beneficial Breach of Contract

A farmer agrees in the spring to sell grapes to a winery in the fall, but over the summer, the price of grape jelly rises and the price of wine falls. The winery can no longer afford to take the grapes at the agreed price, and the grape farmer could receive a higher price by selling to a jelly factory. In this case, it may be in the interest of both the farmer and the winery to breach the contract. 

If the parties were to uphold the contract, the farmer would miss out on an opportunity to sell at higher prices and the winemaker would suffer by paying more than it can afford to, given what it would receive for the resulting wine at the new market price . Consumers would also be punished; the change in relative prices for grape jelly and wine signal that consumers want more jelly and less wine. 

Economists recognize that upholding this contract (making more wine and less jelly, contrary to consumer demand ) would be economically inefficient for society as a whole. Breaching this contract, therefore, would be in the interests of everyone: the farmer, the winemaker, the jelly maker, and the consumers. 

Societal Effects of Breach of Contract

It could also be the case that a breach of contract is in the interest of society as a whole, even if it may not be favorable to all of the parties in the contract. If the total net cost of breaching a contract to all parties is less than the net cost to all parties of upholding the contract, then it can be economically efficient to breach the contract, even if that results in one (or more) parties to the contract being harmed and left worse off economically.

This is an example of what economists call Kaldor-Hicks Efficiency: If the gains to the winner from breaching the contract outweigh the losses to the loser, then society as a whole can be made better off by breaching the contract.

What Is Considered a Breach of Contract?

A breach of contract occurs when one party fails to fulfill its obligations as outlined in the contract. That could include something relatively minor, such as being a couple of days late on a payment, or something more serious.

Can I Sue for Breach of Contract?

If you have a contract with another person or entity and they fail to fulfill the contract as agreed, you can file a lawsuit to recover any damages that you lost as a result. Before filing a lawsuit, though, you will want to speak with a lawyer who specializes in contracts to ensure that your case has a possibility of success.

Is Breaching a Contract a Crime?

Breaching a contract is generally not considered a criminal offense unless it involves something like fraud. It is considered a matter between private parties, rather than something that affects society as a whole.

What Are the Consequences of Breaching a Contract?

That depends. Generally speaking, if it can be proved that there was a contract and that it was breached, then the party wronged should be left in the same economic position that they would have been in had no breach occurred.

What Is the Most Often Awarded for Breach of Contract?

If you successfully take someone to court for breach of contract, the most common remedy is compensatory damages. Usually, a court will order the person who breached the contract to pay you enough money that you can go elsewhere to get the services they failed to provide.

Contracts are specifically designed to be upheld and to give all parties to the agreement peace of mind. However, there are cases when they are breached, and a solution must be found to remedy a failure to perform promised obligations.

While not strictly a crime, a contract is there to be honored—unless all parties agree to renege on it—and it is not particularly easy to wriggle out of one. The punishment for breaching may be already outlined in the contract itself. Alternatively, a resolution might need to be found, which can result in the breacher being forced to abide by its original commitment.

Stanford Law School, The Center for Internet and Society. “ Why Breach of Contract Should Never Be a Crime .”

Cornell Law School, Legal Information Institute. “ Breach of Contract .”

NYU School of Law. “ A Principle of Justified Promise-Breaking and Its Application to Contract Law .”

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We were retained by the plaintiff, a law firm, to quantify lost profits following the termination of its contract for collection services with a Schedule A bank.

We calculated the balance owing to the law firm based on the historical collection pattern and projected collections for approximately 35,000 outstanding matters. Our report was used as evidence to support our client’s claim based on its legal interpretation of the termination provisions agreement.

Understanding Breaches Of Contracts

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What is a breach of contract?

A breach of contract occurs when a party to a contract fails to comply with an obligation placed upon it under the contact (i.e. it is in breach of a contractual term of the contract) which may be a written contract, a verbal contract or a contract by conduct.

There are many examples of contractual terms being breached resulting in legal claims. Some of the most common are:

• Late delivery of a product/service;
• Defective workmanship;
• Failure to make payment;
• Breach of restrictive covenants;
• Wrongful termination of a contract;
• Breach of terms implied into a contract by statute; and
• Breach of confidentiality.

As an example, a term within a written contract states:

“Party A must make payment of £100 to Party B by 4pm on 1 September 2024”.

If Party A fails to make payment to Party B by 4pm on 1 September 2024, Party A would likely be in breach of the aforementioned contractual term.

Types of breach

Not all terms of a contract have ubiquitous importance and not all breaches of contract have the same level of severity. As a result, a party may have different remedies available to it depending on which term of the contract is breached.

Typically the types of breach of contract are:

• Minor breach of contract – a minor (or partial) breach of contract does not damage the contract beyond repair and is usually straightforward to remedy. As an example, if Party C agreed to supply a delivery to Party D at 9am and instead delivered at 9:01am, although Party C is likely in breach of contract, it is unlikely to cause any loss to Party B;
• Material breach of contract – a material breach of contract may occur when there is a breach of a contractual term jeopardising the core purpose of the contract. Such a breach may lead to damages and, in some cases, the termination of the contract;
• Fundamental/repudiatory breach of contract – a fundamental breach or repudiatory breach of contract is where the severity of the breach is of such significance that it impacts the root of the contract. Such a breach may enable the innocent party to claim damages and/or terminate the contract. As an example, if Party E promised to deliver equipment to Party F on a particular date with time being of the essence but then failed to deliver at all, that may constitute a fundamental breach of contract entitling Party F to, inter alia, claim damages and/or terminate the contract; and
• Anticipatory breach of contract – this type of breach occurs where one party to a contract clearly demonstrates or communicates that it will not fulfil its contractual obligation(s) to the other. As a result, an innocent party may be able to claim for damages and/or terminate the contract.

Remedies for breach of contract

The common remedies for breach of contract are:

• Damages – generally, if a breach of contract causes loss to the innocent party, the innocent party may be entitled to claim damages for those losses from the defaulting party. Damages are complex and can also include damages for loss of bargain/profits. A party that sustains losses is usually expected to mitigate its losses (i.e. if losses are being incurred that party ought to take action to stem/reduce those losses rather than allowing those losses compound);
• Termination of the contract – an innocent party may have the right to terminate the contract following a breach of contract by the other party. Such a step must be exercised carefully. Not all breaches of contract enable the innocent party to unilaterally terminate the contract;
• Injunctions – an injunction is an equitable remedy. It may be awarded where monetary compensation is inadequate. An injunction usually permits or prohibits a party from doing something to prevent its breach of contract or its continuing breach of contract; and
• Specific performance – specific performance is an equitable remedy and may be used by an innocent party to compel the defaulting party to perform its contractual obligation(s) under the contract. Specific performance is typically awarded when monetary compensation is inadequate.

Steps you can take to minimise your risk

In order to take precautions and protect yourself and/or your company, legal advice should be obtained before entering into contracts (particularly those of significance). The professional drafting of a contract may protect you and/or your company against a catastrophic claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Corporate/Commercial Law

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Reindustrialization of the economies of rural territories (a case study of Novosibirsk oblast)

• Regional Development
• Published: 16 December 2017
• Volume 7 , pages 342–351, ( 2017 )

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Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences, Novosibirsk, Russia

G. V. Zhdan, I. V. Shchetinina & Yu. P. Voronov

Siberian Research Institute of Agricultural Economics, Siberian Federal Scientific Centre of Agro-Biotechnologies, Russian Academy of Sciences, Krasnoobsk, Russia

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Original Russian Text © G.V. Zhdan, I.V. Shchetinina, Yu.P. Voronov, 2016, published in Region: Ekonomika i Sotsiologiya, 2016, No. 4 (92), pp. 87–112.

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Zhdan, G.V., Shchetinina, I.V. & Voronov, Y.P. Reindustrialization of the economies of rural territories (a case study of Novosibirsk oblast). Reg. Res. Russ. 7 , 342–351 (2017). https://doi.org/10.1134/S2079970517040116

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Received : 15 August 2016

Accepted : 20 July 2017

Published : 16 December 2017

Issue Date : October 2017

DOI : https://doi.org/10.1134/S2079970517040116

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