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3 breaches of contract that might occur

On Behalf of | May 26, 2024 | Contract Law

Contracts are an important part of business because they outline the terms of deals made between companies. When both companies uphold their respective ends of the contract, it can be completed successfully. 

There are times when one party may not meet the terms of the contract. This is known as a breach of contract, and several different types may occur.

1. Material breach

A material breach is a significant violation that goes to the heart of the contract in a way that deprives the non-breaching party of the benefits expected from the contract. This type of breach typically justifies the non-breaching party’s decision to terminate the contract and seek damages. 

2. Minor breach

A minor breach, also known as a partial or non-material breach, occurs when the breaching party fails to perform some aspect of the contract but doesn’t substantially undermine the contract’s overall purpose. The non-breaching party is still required to fulfill their part of the agreement but may seek damages for any losses incurred due to the minor breach. 

3. Anticipatory breach

An anticipatory breach happens when one party indicates in advance that they won’t be able to fulfill their contractual obligations when they are due. This can be communicated through explicit statements or actions that unequivocally suggest non-performance. When an anticipatory breach occurs, the non-breaching party can immediately treat the contract as breached and seek remedies, such as damages or contract termination, even before the performance is due. 

A contract breach is a serious matter that requires action. In some cases, the non-breaching party may have to file a legal claim to get the compensation they’re due for the breach that occurred. 

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