It can be difficult to work out if a party to a contract is in breach of contract. In many circumstances, this confusion is caused by a contract that was initially poorly drafted or designed. Nevertheless, there are a number of common ways that a contract can be breached.
In this article, we set out the four major breaches of contract that commonly occur.
1. Material Breach
The first and most severe type of breach is a “material” breach. Generally, a material breach of contract involves one of the key elements of the contract not being provided or undertaken as agreed. For example, if you purchased a computer package online and only received a monitor upon delivery, the provider would have materially breached your contract.
Many more complex contracts actually define what is and what is not a material breach of contract. However basic everyday contracts generally do not. Generally, upon the occurrence of a material breach, the contract will be deemed to have ended and the party who has suffered from the breach will be in a position to claim remedies, including damages.
2. Minor Breach
It’s important to be clear that not all breaches of a contract will be material and hence immediately end the wronged party’s obligations. In the example above, a minor breach of contract would be if the computer company delivered the equipment but a couple of pages were missing from the user manual. This would not lead to an immediate cancellation of the contract. But the seller would have to remedy the breach of contract.
3. Anticipatory Breach
An anticipatory breach of contract involves one of the parties to a contract stating that they will not fulfil their side of the contract before they are due to do so. This sort of a breach of contract is not that common, and it still entitles the wronged party to remedies.
4. Actual Breach
This is the most common way that a party will breach a contract. It occurs when the time arrives for a party to perform their side of an agreement and they don’t perform their end of the bargain.
If you’re a party to a contract that has been breached in one of the above four ways, you need to work out what remedies you can try to extract from your counterparty. A LegalVision contract lawyer can assist you. Get in touch on 1300 544 755 or by filling out the form on this page.
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