Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your area.
A contract is only as good as the parties' willingness to honor it. When someone breaks their agreement with you - whether it's a contractor, employer, business partner, or vendor - you have legal remedies. Understanding breach of contract law helps you protect your interests.
Statute of Limitations: Contract breach claims have time limits - typically 4-6 years for written contracts, 2-4 years for oral. Don't wait too long to take action.
Types of Contract Breach
Material Breach
- Goes to the heart of the contract
- Defeats the purpose of the agreement
- Allows non-breaching party to terminate
- Entitles you to full damages
Minor Breach
- Less significant violation
- Contract still substantially performed
- May not justify termination
- Still entitled to damages for losses
Anticipatory Breach
- Party indicates they won't perform
- Clear repudiation of contract
- Don't have to wait for actual breach
- Can immediately seek remedies
Partial Breach
- Some obligations met, others not
- Can recover for unperformed portion
- May still owe for portion received
Check for Cure Period: Many contracts give the breaching party time to fix the problem before you can terminate. Read your contract for notice and cure provisions.
Elements of a Breach Claim
What You Must Prove
- Valid contract exists
- You performed your obligations (or were excused)
- Other party failed to perform
- You suffered damages as a result
Contract Validity
- Offer and acceptance
- Consideration (something exchanged)
- Legal capacity of parties
- Legal purpose
- Meeting of the minds
Your Performance
- Show you did what you agreed to do
- Or were prevented from performing
- Or other party's breach excused your performance
- Keep records of your performance
Contract Remedies
Compensatory Damages
- Put you in position if contract was performed
- Direct damages from the breach
- Must be proven with reasonable certainty
- Most common remedy
Consequential Damages
- Indirect losses from breach
- Must be foreseeable at contract time
- Often limited in contracts
- Lost profits, additional costs
Specific Performance
- Court orders party to perform
- For unique items (real estate, art)
- When money damages inadequate
- Not for personal services
Rescission
- Cancel the contract entirely
- Return parties to pre-contract position
- For fraud or material breach
- May include restitution
Mitigation Duty: You have a duty to minimize your losses after a breach. You can't just let damages pile up - take reasonable steps to reduce harm.
Common Contract Disputes
Service Contracts
- Work not completed
- Quality below standards
- Timeline not met
- Materials different than agreed
Employment Agreements
- Wages not paid
- Benefits not provided
- Wrongful termination
- Non-compete violations
Sales Contracts
- Goods not delivered
- Quality not as specified
- Payment not made
- Wrong quantity
Lease Agreements
- Landlord not making repairs
- Tenant damaging property
- Early termination
- Security deposit disputes
Defenses to Breach Claims
Common Defenses
- No contract: Missing essential terms
- Mutual mistake: Both parties wrong about facts
- Impossibility: Performance became impossible
- Frustration of purpose: Purpose no longer achievable
- Statute of frauds: Required to be in writing
Procedural Defenses
- Statute of limitations expired
- Improper notice
- Failure to follow contract procedures
- Waiver of breach by conduct
Oral Contracts: Some contracts must be in writing to be enforceable (land sales, agreements over 1 year, guarantees). Even valid oral contracts are harder to prove - always get it in writing.
Before Filing Suit
Review the Contract
- Check exact terms and obligations
- Look for dispute resolution clauses
- Find notice requirements
- Review limitation of liability
- Check for cure periods
Document Everything
- The contract itself
- All communications
- Your performance
- Their breach
- Your damages
Send Demand Letter
- Identify the breach
- State your damages
- Demand specific remedy
- Set deadline for response
- Follow contract notice provisions
Taking Legal Action
Small Claims Court
- For disputes under state limit
- No lawyer required
- Faster resolution
- Lower costs
- Bring all documentation
Civil Court
- For larger amounts
- May want attorney
- More formal procedures
- Discovery process available
Arbitration
- If contract requires it
- Usually binding
- Faster than court
- Limited appeal rights
Calculating Damages
Direct Damages
- Cost to complete work elsewhere
- Cost to repair defective work
- Difference in value
- Return of payments made
Incidental Damages
- Inspection costs
- Storage costs
- Transportation costs
- Finding replacement
Lost Profits
- Must be proven with certainty
- Show clear calculation
- Must be foreseeable
- Often disputed
Enforce Your Contract Rights
Generate a demand letter for contract breach and damages recovery.
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