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How does a contract breach happen?

How does a contract breach happen?

On Behalf of | Apr 17, 2023 | Business Law |

Businesses frequently enter contract agreements with others. Well-made contracts can benefit everyone by ensuring that contracted parties understand their legal obligations.

Unfortunately, contract breaches can occur and they can be very problematic. Here’s what you should know about contract breaches:

Minor breach

A minor breach may be anything that slightly goes against a contract. This kind of breach, typically, doesn’t cause any significant harm. However, a minor breach can still be frustrating because the contracted party went against the terms of an agreement.

For example, a minor breach could happen when a party failed to deliver a shipment of tires on the due date. Instead, the shipment arrived a day late. While this delay may not have caused any major damages, it could still be problematic.

Material breach

A material breach happens when a product or service wasn’t delivered or completed according to the terms of a contract. This kind of breach can cause significant damages.

Going back to the tire example, a material breach could occur when a shipment of tires was delivered. After the non-breaching party examined the tires, they discovered that the tires were a size too small, making them unusable. Because of this, the use of the tires caused the affected party to suffer sales losses. 

Anticipatory breach

Breaches often are discovered at the time of the breach. But, in some cases a party may realize a contracted party will breach the terms of the contract – this is called an anticipatory breach. When an anticipatory breach happens, the non-breaching party may discuss how the potential breach is resolved before it occurs.

Actual breach

Some breaches are the result of a direct refusal to follow the terms of a contract, which is referred to as an actual breach. An actual breach is a clear admittance that the contracted party will not or can not fulfill their end of a bargain. 

If you are in the middle of a contractual dispute then it is important to protect yourself. Having legal guidance will help you to assert your rights. 


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