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, which are explained in this article.
1. Material Breach of Contract
The first, and most sever type of breach, is called “material” breach. Generally a material breach of contract involves one of the key elements of the contract not being provided or undertaken as agreed. If, for instance, you were to purchase a computer package online and only receive a monitor upon delivery, your contract with the provider would be materially breached.
Many more complex contracts actually define what is and what is not a material breach of contract, but basic every day contracts 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.
2. Minor Breach of Contract
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. A minor breach of contract related to our above example could, for instance, 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 of Contract
An anticipatory breach of contract involves one of the parties to a contract stating, before they are due to fulfill their side of the contract, that they will not be doing so. This sort of a breach of contract is not that common, and it still entitles the wronged party to remedies.
4. Actual Breach of Contract
This is of course 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.
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 attorney can assist with this.