Breach of contract is a cause of legal action that is filed in a civil court. This occurs when two or more parties enter into a binding agreement, and one or more of those parties fails to perform its obligations set out in that accord. Violating this valid contractual agreement means that the injured party can bring a lawsuit against the offending party for damages, both monetary and otherwise.
A contract is an agreement between two or more parties that creates obligations enforceable by law. It must be created by the mutual assent of all the parties and not forced by fraud or duress. To create a contractual relationship, one party offers terms to the other party or parties, which are then accepted by the latter.
This is most commonly cemented in the form of a written document which is signed by the parties. The other vital element to a true legal contract is known as consideration. Consideration can be rather difficult to define, and the simplest way to state it is that is something of value to make the agreement binding.
There are a number of ways the element of consideration can be filled. The easiest example is money, of course, but as long as it is something of value to the parties involved.
The ways that a party can violate a contract are as numerous and varied as things that can be contracted for, which is nearly endless. As long as the above elements are met and it is not illegal, it can be contracted for. These relationships are incredibly common in business transactions, and thus many common breaches occur here as well. Common violations include:
- Failure of buyer to provide payment (or underpay) for their purchase.
- Failure of seller to deliver goods or services to buyer as agreed.
- Any party breaking non-competition clauses by entering into a contract with another party outside of the original contractual relationship.
- Failure of seller to provide the proper product (or product amount) as agreed upon, or delivering buyer a product of lesser quality
- Illegally terminating contractual relationship, or terminating relationship against contractual specifications
- Fundamental breach by any party. Also known as a material breach, this is when a term is so vital to the agreement that if not properly fulfilled, completion of the contract becomes impossible.
- Failure to deliver product or service on time.
There are of course many other ways to violate a contract, and it all depends on the language of the agreement.
There are many ways that an aggrieved party can ask a court to remedy the breach of a contractual relationship. The most obvious, of course, is monetary damages. But there are some circumstances where money won’t fix the harm that the breach causes. In these cases, the plaintiff can ask for an alternative remedy.
One of the most common is specific performance. This is where the court orders the liable party to perform the broken contractual duty to compensate for the breach. Examples might be the court ordering the defendant to render payment as specified in the original contract, or ordering them to deliver the product or service specified.
It is important to note that the law only allows for damages to compensate the plaintiff for injuries/damages caused by the breach. No punitive damages are awarded in contract law. Another possible option is the right of termination. The plaintiff can choose to terminate the contractual relationship altogether, no matter how trivial the breach might be.
Sometimes a breaching party will try to wiggle out of paying damages or performing duties by arguing that a contractual relationship never existed. This might be through lack of consideration or another reason. If this is the case, the wronged party might be able to seek some relief through the legal doctrine of Promissory Estoppel.
If the plaintiff is able to show that they reasonably relied on the defendant’s promise and was harmed as a result, then a civil court might choose to award damages anyway, in spite of the fact that no contract existed. This is to stop lying and deceitful parties from avoiding their duties on technicalities.
When one side violates their obligations to another, the result can mean significant losses in money and other assets, and such behavior is against the law in every state. If you believe that someone violated their contractual relationship with you and you were harmed as a result, you have the right to seek proper compensation.
Because every state’s law is different, it is important to seek the services of an experienced contracts attorney in your area. They will know the intricacies of that jurisdiction’s contract laws and the best path forward to protect your legal rights.