Have you wondered what constitutes breach of contract? Any individual engaged in a commercial enterprise should be knowledgeable about the value of contracts. Contracts are the bread and butter of the business world, and understanding how to craft them properly as well as handle potential disputes can go a long way. Unfortunately, as a business owner, it is likely that you may encounter some kind of breach of contract over the course of interacting with buyers, sellers or independent contractors.

Defining Breach of Contract

Breach of contract refers to a legal action where a binding agreement has not been honored by one or more individuals. It can be as simple as a failure to pay an invoice or as complicated as failure to perform a complex task correctly or on time (or both).  If the party who has agreed to this binding contract is not able to fulfill his or her end of the bargain, then the individual could be held as in breach of that contract.

Minor vs Material Contract Breaches

There is a difference between minor and material breaches of contract. In a minor breach, the “wronged” party is not eligible to sue for specific performance (an order to comply with the contract) or rescission (an order that the contract is null and void) and can instead only sue for actual damages incurred as a result of the breach of contract.

Material breaches, however, refer to failure to perform an essential term of the contract, which allows the other party to either collect damages as a result of the breach, compel performance or rescind the contract. There are serious breaches that fall under the umbrella of material breach, so you should make sure your attorney has handled cases like this before and that he or she has experience with pretrial discovery, motions, trial and, if necessary, an appeal.

Consulting with an Arizona business litigation attorney can be critical for understanding what constitutes a breach and how to handle it appropriately. An attorney can tell you about all of your options in this situation so that you can make an informed decision about the best way to handle a breach of contract.

Dealing with Contract Breaches

The three major ways of dealing with a breach of contract are arguing for damages, asking for specific performance, or canceling the contract so that the non-breaching party receives restitution. Depending on your unique circumstances, one of these may be more appropriate for you than another. Attempting to resolve a breach of contract on your own should always be your first course of action, but it can also be beneficial to speak with an Arizona business litigation attorney to understand your rights and responsibilities as well.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding What Constitutes Breach of Contract?, or any other litigation matter, please feel free to contact us at 480.461.5300,  log on to udallshumway.com,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.