When you enter into a contract with someone, you may be excited at the prospect of combining forces or services with another party to enhance your business. Although you rely on the other party to uphold their end of the contract, they may act in a way that goes against the terms of the agreement. This is known as breach of contract, and it can have major consequences for your business and future success. 

A party may be in breach of contract if they do any of the following:

  • Fail to make a payment on the terms or services that were agreed upon

  • Fail to provide the services or goods as listed in the agreement

  • Fail to complete the job as agreed upon

  • Fail  to provide quality goods and services

There are several different types of breaches. A partial breach occurs when only part of the contract is broken. If the other party provided a portion of the goods and/or services, it may be considered a partial breach. A material breach, on the other hand, occurs when a party uses inferior products or products that are cheaper than what was agreed upon in the contract. In this instance, the party providing the materials would have to redo the project as originally agreed upon. 

A fundamental breach of contract enables the victims to terminate the contract or file a lawsuit against the other party. Finally, an anticipatory breach of contract occurs when one party believes the other party will not hold up to their end of the agreement, and wants to back out before the breach takes place. 

This information is intended to educate and should not be taken as legal advice.