What Happens After a Breach of Contract?

For many businesses, contracts become the lifeblood of your day-to-day operations. You expect the person who signed the contract to fulfill their end of the bargain. When they don’t, it can quickly turn into trouble for your company. Contract breaches often result in lost profit, time, and resources. So how can you proactively handle this frustrating incident? Keep reading for valuable tips to protect your business.

Determining What Kind of Breach Occurred

Not all contract breaches are the same, and one may affect your business differently than another might. The first step after a breach has occurred is to determine which category it falls under. Doing so will give you a more informed approach to the problem.

There are four main kinds of breaches that can take place:

  1. Material breach: occurs when one individual does not perform the duties that the contract required them to and gives the injured party the right to pursue damages in court
  2. Fundamental breach: occurs when the party who created the contract does not follow through on the very basis of what you agreed to, which also allows the injured party to file a lawsuit
  3. Anticipatory breach: if one party is clearly not going to perform the entirety of their duties, the other party can pursue monetary damages as a result
  4. Minor breach: occurs when there are a few errors in the duties that one party completed and may result in monetary compensation

What damages can I recover as a result?

Before pursuing compensation, you must prove that the contract existed, was broken, and that you lost money as a result. You also have to show that the specific party in question is responsible for the breach of contract.

The circumstances of your contract breach determine the compensation you will be liable for. Common forms of compensation include:

  • Compensatory damages
  • Consequential and incidental damages
  • Liquidated damages
  • Punitive damages
  • Attorney’s fees

The more detailed the claim or lawsuit you file, the better your choices of obtaining a favorable outcome. It can be difficult to pursue legal action on your own, especially without any former experience doing so. Trust my firm to handle the details for you! I have nearly a decade of experience and am committed to achieving the very best outcome for my clients.

Schedule your free consultation to speak with a Miami business litigation attorney today.

Categories: Breach of Contract