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How To Deal With Breach Of Contract

Business law is a broad area of law that deals with topics like employment disputes, contracts, shareholder and partner disputes, and consumer law. In Appleton and the rest of Wisconsin and the country, state and federal business laws support and sustain our economy.

Contracts are a way many businesses protect themselves and their clients. When you sign a contract, whether it is an employment contract, a lease, or a contract for services, you are signing a legally binding document that outlines your rights and your obligations regarding the subject of the contract. When a party fails to uphold the terms of a contract he or she signs, he or she commits a breach of contract.

Types Of Contract Breaches

There are four ways a contract can be breached. They are:

  • Material breaches: This is the most severe type of breach of contract. In a material breach, a contracted party fails to perform their duties as outlined in the contract. For example, failing to pay a contracted party after he or she has completed his or her job is a material breach of contract
  • Anticipatory breaches: When it becomes clear that a party will not be able to fulfill their contractual obligations, the other party may state that an anticipatory breach has occurred and seek compensation
  • Fundamental breaches: With a fundamental breach of contract, the nonbreaching party may suspend the contract before it is completed and seek compensation for his or her damages because the other party made no effort to uphold their obligations in the contract. An example of this is an individual purchasing a car and signing a sales contract, then going to the dealership to pick up the car and finding that it had been sold to another buyer
  • Minor breaches: This is the least severe breach of contract. With this type of breach, both parties performed their contracted roles, but one or both might have made a minor, fixable error such as a contracted painter painting a room the wrong color

What You Can Do

Depending on the type of breach that occurred and the extent of the damages it caused, the nonbreaching party may seek compensation for their damages as well as changes to the contract.

Often, contracts include how disputes will be handled if they arise. Many state that disputes are to be resolved through arbitration, which is a form of alternative dispute resolution that allows disputes to be settled outside the courtroom by neutral parties known as arbitrators.

The breaching party may be required to perform their duties as outlined in the contract or the contract may be canceled, depending on the details of the case. The nonbreaching party may receive compensation for its costs and the losses it suffered because of the breach, for specific damages stated in the original contract, and/or for incidental costs that arose as a result of the breach.

Work With An Experienced Business Lawyer

Before you sign a contract, go over it with an experienced Appleton business attorney to make sure that it does not contain any unfair or illegal clauses. If it does, consider revising the contract and having the other party sign the new version. If you are involved in a breach of contract dispute, talk to an experienced business lawyer about your rights and options. Contact our team today to schedule your initial consultation with us. Call 920-202-8872 or email us.