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Breach of Contract

Breach of contract is one of the most common reasons we hear from business tort clients at Butler Wooten & Peak LLP of Atlanta. In business law, a breach of contract occurs when one party fails to abide by any term within the contract without a legitimate legal excuse. The contract may be written or oral, as long as it is legally binding. Breaches of contract can take many forms in the business world, from an employee working for a competitor to a supplier failing to deliver goods on time. If someone’s breach of contract recently caused damage to you or your business, we can help.

Defining “Breach of Contract”

There must have been an actual failure or refusal to perform the party’s contractual obligations, without a legal reason for doing so, for a breach of contract claim. A breach of contract could occur before the start of work, during the work’s completion, or conduct that prevents the contract from performing properly. There can be actual breaches, which occur when one party does not fulfill his/her duties, or anticipated breaches, when one party knows he/she will not fulfill the contract. Both types are problematic and can result in damages to the other party. Examples of breaches of contract include:

  • Failure to complete a job on time
  • Delivery or sale of goods not in the same condition as described
  • Failure to administer the goods or services
  • Deviating from the promises made in the contract
  • Interference with the performance of obligations in the contract
  • Refusing to accept payment

Any time there is a legal contract, and one person breaks its terms, the harmed party may have a breach of contract lawsuit on his or her hands. The breach must have also caused you harms, such as loss of income or business, to file a claim against the offending party. On top of actual vs. anticipated breaches, there is a difference between material and minor breaches as well.

Material vs. Minor Breaches of Contract

A major breach of contract, known as a “material” breach, is one that contrasts the very heart of the agreement between the parties. Material breaches often cause one party to terminate the contract with the other party and sue for damages. The courts will rule if a breach of contract was material by examining the nature of the breach and the harms it caused the other party. If the parties can solve the problem easily with money or effort while continuing the contract, the breach probably wasn’t material.

If the courts decide the breach qualifies as “material,” you will be able to end the contract and potentially receive compensation for damages. A breach of contract claim can lead to recovery for your business damages, including financial losses, harmed reputation, and loss of business – plus extra money in punitive damages if the defendant committed the breach out of fraud, malice, or intent to harm you. Compensatory damages can cover what you should have gotten out of the contract, as well as direct damages such as lost profits.

A minor breach of contract, on the other hand, may involve some failure to perform a duty, yet the party still receives the goods or services, e.g. a goods supplier delays a delivery. Unless the contract specifically stated that deadlines for delivery were strict, the courts might consider a reasonable delay just a minor breach in contract. In such a case, the affected party may still receive damages. At Butler Wooten & Peak LLP, we can help you with any type of breach of contact claim in Georgia. Contact us today for a free case evaluation.