When you believe a contract has been violated and your business has suffered, you have legal recourse through the courts. If the need ever arises, it's good to know what breach of contract is, how it applies and what the legal system can do to help you.
When one party doesn't fulfil the obligations of a contract, that's called "breach of contract". Contracts can be breached in whole (complete failure to do the job) or in part (partial failure to do the job).
Don't put the cart before the horse
Before you sue for breach of contract, it's good to go over what is legally required to state that the contract has been breached:
- The contract must be valid
- You must show the defendant did indeed breach the contract's terms
- You must have done everything required in your part of the contract
- You must have notified the defendant of the breach before filing a lawsuit
You also need to determine what kind of breach occurred: a material breach, a partial breach or an anticipatory breach. A material breach is of such magnitude that you don't have to fulfil your part of the contract. A partial breach doesn't prevent you from fulfilling your part of the contract. An anticipatory breach occurs when you suspect the defendant won't complete the contract.
What can result from a lawsuit
If the defendant is found to be in breach of contract, there are several ways the court might try to remedy the issue.
There are major categories of remedies:
The court may order the defendant to pay you general damages for the loss you incurred, including recompense for the loss of business you could have done if the contract had been fulfilled.
The court may award punitive damages, or extra money added the damages as a form of punishment.
The court may order an injunction, which requires the defendant to stop the action that is causing the breach of contract.
The court may also order a rescission of the contract to terminate the deal.