Just hearing the term “breach of contract” is bound to send shivers up anyone’s spine. This is especially true if you’re accused of violating a binding agreement with someone else. Perhaps you tried your best to do right by a homeowner who hired you to do some landscaping work, but now they insist you fell short of the agreed-upon terms, or maybe your recent deal with a business partner has suddenly turned contentious. Either way, a potential legal battle is looming, and you just want it all to go away.
At the same time, you can’t help but wonder how this all could have been avoided.
Don’t worry; you’re not alone. Breach of contract disputes are among the most common reasons for lawsuits between individuals, small businesses, and large corporate entities. They involve parties who willfully violated an agreement and those with a legitimate defense for what happened. They are also among the most avoidable disputes — provided all parties follow these simple rules.
What Is Breach of Contract?
A breach of contract is when two parties enter into a legally-binding contract and one of those parties intentionally or unintentionally violates the terms of said contract. Sometimes, the parties involved can resolve the issue between themselves. Other times, one party feels so wronged by the other that they file a claim against the other for damages. There are generally four types of contract breaches:
- Minor — When someone doesn’t deliver a product or service by the agreed-upon due date. For example, the florist for your wedding promises in the contract to deliver flowers to the reception hall by a specific date but shows up a day late.
- Material — When a party claims they received something different from what they agreed to. For example, you ordered 400 brochures for a legal conference but received brochures that have nothing to do with your business.
- Actual — When one party refuses to adhere to their end of the contract.
- Anticipatory — When a party tells the other before starting work that they won’t be completing the contract terms.
Just because someone claims you are in breach of contract does not mean they are correct. But being in this position is never a good feeling, so here are a few ways to avoid being in breach of contract.
Clearly define the terms and conditions of the contract.
Oral or hand-shake agreements often devolve into a “he said, she said” situation of sorts. Your contract should be in writing, and the language should be as detailed and specific as possible. This includes clearly defining each person’s responsibilities, expectations, timelines, requirements, etc. As a result, there shouldn’t be any misunderstandings about what happens next.
Include remedies and penalties in the contract.
As part of the agreement, penalties and consequences for breaching the agreement should be clearly spelled out to deter anyone from breaching the contract. This could include monetary damages, legal remedies, and termination of the contract.
Each party should have a signed copy.
Once each party has read, understood, and agreed to the language in the contract, the paperwork should be signed and provided to all parties. Before signing, ensure any questions have been answered and that everyone is on the same page.
Keep records of all communications.
An easy way to avoid miscommunication and breach of contract disputes is to keep records of all communications, including text and email exchanges and any changes made to the original agreement. Communicating regularly with the other party keeps everyone on the same page and allows for any issues or concerns to be addressed promptly.
Get a lawyer involved.
Contract law can be tricky, so you should always have a lawyer draft one for you. This ensures each party’s roles and responsibilities are spelled out, the correct language is incorporated to avoid any potential loopholes that could hurt one or both parties, and the contract is legally binding and enforceable in a court of law.
Review the contract regularly.
This is crucial for long-term projects and agreements. Many times, older contracts need to be updated with relevant terms and conditions or to account for any important changes that may have happened along the way.
In addition to handling business transactions and drafting, our firm handles a broad spectrum of commercial/business disputes and litigation matters. Commercial disputes may include complex issues such as breach of contract, breach of fiduciary duty, fraud, civil conspiracy, partnership dissolution, and shareholder rights. Christman Attorneys, PLLC, has successfully represented all types of clients, from individuals to small businesses and corporations.
Please call Christman Attorneys, PLLC, for your legal needs today!
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