In many instances, in order for businesses to operate properly promises have to be made and kept. Because of this reality, many individuals and businesses find themselves relying on the promises of others. This is the basis of contracts. Most often, parties come together to barter over some sort of exchange, and their agreement is memorialized in writing. When the terms of a contract are broken, then a breach of the contract may have occurred. A breach can leave a party worse off than they were, which is why many breach of contract issues result in some sort of legal action.
A breach can take many forms and is wholly dependent on the type of agreement that was in place. For example, a business that agreed in a contract to deliver certain goods by a certain date may be in breach of that contract if the goods are not delivered on time. In some cases, a breach occurs when a party fails to perform any of the obligations listed the contract. These breaches are labeled as either material or immaterial, a label that can have a significant impact on the remedies available to the victim of contract breach.
There are three types of remedies that may be obtained when a contract is breached. First, a party may be able to recover damages, which seeks to put the party back in the position they were in prior to the breach, punish the breaching party or provide them with an amount of damages that was specified in the contract should a breach occur.
The second remedy is specific performance. This remedy requires the breaching party to adhere to the obligations contained within the contract. Lastly, a party can seek to have the contract cancelled, which would also require the breaching party to pay to put the victim back in the position they were in prior to the breach.
Contract disputes can be a challenging aspect of business law, but it can also be critically important. Thus, if you are dealing with a contract dispute, believe a contract was breached or are even considering taking the step to draft a contract, it is important to understand how to address or resolve any of these contract issues. Taking such steps could help ensure your rights and interests are well protected.