A legal contract is an agreement between two parties that is enforceable in the court of law. A legal contract is used to bind the parties involved in it to ensure that they perform their duties and responsibilities that are stated in the contract. With that being said, you should know that getting yourself into a contract, big or small, is a serious matter.
Once you are bound to a contract, there is actually no turning back. You should follow all of the terms and conditions stated in it. This is also one of the reasons why you should read it carefully before agreeing and affixing your signature on that piece of paper. Now, if you are careless, you will definitely get yourself into so much trouble. What kind of trouble? That would be paying hefty fines or you can win an instant ticket to jail.
Contracts can be both written or verbal. Contracts done either way are considered legal, but the most advantageous is the one that is written. Written contracts provide a document that serves as proof that the parties agreed to the said contract. It can also be used as a basis that one has breached the said contract.
A breach of contract happens when the parties involved in a contract failed to follow or do their duties and responsibilities that are related to the contract. A breach of contract is a serious matter and should not be taken lightly. In this article, we will focus on how contract breaches can be remedied. Sample guides, sample notices, and sample discussions about the remedies of a contract are provided to further help you understand all about it. You may also download them as you please.
Remedies for Breach of Contract
A Comparison of the Remedies for Breach of Contract
Sample on Breach of Contract
Notice of Breach
When or How Does a Breach of Contract Occur?
In order for a contract to exist, a party should offer something that is being accepted by another party. An offer and an acceptance are one of the important elements that make up a contract. If the other party accepts the offer, this means that they agree to the terms, conditions, and responsibilities therein. That is how a contract is made. How about a breach of contract?
Remember the terms, conditions, and responsibilities that the parties involved agreed on in a contract? That is used as a basis for a breach of contract. How? Of course one should be familiar with the terms and conditions to avoid any breach of the contract. But there will always be a time when one either accidentally or intentionally breaches it. A breach occurs if any of the parties fail to do their part of the responsibility in the contract, or if they do not comply with the terms and conditions that were stipulated in it. This then becomes a serious matter, and unless a remedy is found, this breach of contract will definitely have a lot of things to go wrong.
Well, a breach of contract can only happen if the contract is proven to be legal. The next time you come across a contract, be sure that you are familiar with the things that are hidden behind the lines, or at least know how things work with it. Do your research and check out sample contracts and other contract templates. If you’re not that confident about yourself, bring a lawyer or a professional with you. They can save you from awfully a lot of trouble.
Damages for Breach of Contract
Remedies for Breach of Contract on International Sale of Goods
Why Do People Get Themselves to Breach Contracts?
There are various reasons why people get themselves into a breach of contract. Some would be forced to breach a contract by some factor or person, others would unintentionally breach a contract, while others intentionally breach contracts just to cause inconvenience to others. Below are some examples and scenarios on why people get themselves to breach contracts.
- There is a house for lease that you are very interested in. So you took advantage of it and read the contract carefully. Both you and the owner agreed to the contract, which includes being able to raise pets, bring visitors to the house and hold parties, and having rights to the entire property on lease for a year. You moved in with your family. It was all good until one month later when the owner came and had half of the garden area fenced because he’s going to use it for gardening, but you’re going to use the area for your weekend party. The owner has breached the contract as you still have rights to the entire property.
- You bought a new cell phone that has a one-year warranty and is replaceable in case it has any factory damages or if the cell phone is faulty. You took it home and used it for two days. On the third day you noticed that the cell phone’s camera is not working. So you went back to the store and told them about this, but they refused to have it replaced because they insist that it was in good shape and that it should have been damaged due to human error. This is another example of a contract breach.
- Companies would want their business or trade secrets out of reach of their competitors. To be able to achieve this, they will need to have their employees sign a confidentiality agreement, which is usually incorporated in their employment contract. The employee should read and understand the terms and conditions of this contract before they are asked to sign it. If the employee fails to do their part and breaches the contract, they may face legal consequences and pay fines for the damages.
- Companies tie their employees to certain bonds to keep them from leaving or resigning from the company. This is done in exchange for training, whether it be abroad or just within the company. The training aims to help improve the employees’ knowledge and skills so that they can meet the needs that the company wants them to yield. Because the company spends thousands for this training, these employees are tied to a bond where they are asked to sign a contract. If the employee decides to leave the company before the contract ends, then they will have to pay for the said bond.
- An artist under a certain label or agency needs to notify or get permission from the said label or agency before they can do a new project. This should be clearly stated and explained to the artist as this is where breach of contracts in the entertainment industry happens. If for any reason the artist and their manager fail to do so, they would breach the contract and would have to face hefty fines and even imprisonment.
Legal Remedies in Breach of Contract
Notice of Breach of Contract and Guide
Notice of Termination and Remedies Template
How Can You Avoid Breaching a Contract?
If you don’t want it, don’t get it. It’s as easy as that. It’s not always the same when handling contracts though. In contracts, it’s either you take the risk and sign it or don’t sign it and have regrets later. Facing the consequences of a breach of contract is indeed a scary thing, not to mention the hefty fines together with imprisonment and other legal consequences. You might just end up getting yourself sued for a lot of cases you didn’t even know are possible. But there is a way on how you can avoid breaching a contract and we have listed them below.
- Determine if the contract is legit or not. It should be the very first thing that comes to your mind every time you are faced with getting into a contract. It is truly a lifesaver, so you should always keep that in mind.
- Consult a lawyer or a legal professional. Admit it, we are not really that in-depth about contracts and breaches, but we still cross the path that leads us to them. If this contract you are signing is one that is critical, especially something business related, it would be best to consult or hire a lawyer to help you understand the contract. They will also give you some advice, including the pros and cons of getting involved in the said contract.
- Read and understand the contract carefully. Another way to avoid getting into a breach is by reading and understanding the said contract. It is read and understand, which is very different from reading alone. You need to make sure that you get every bit of the details on what you are reading.
- Read everything from the first page until the last. Make sure that you cover everything. Don’t end up being awfully regretful because you missed out on something important. Keep in mind that everything in the contract is important and not one or two items should be left out. Knowing everything about the contract will save you from harm.
- Ask a lot of questions. If in doubt, don’t throw it out but ask questions instead. Asking questions can and will definitely help you. Not just about contracts, but about almost everything. So do not be shy to ask and never think that they’ll think you’re dumb for asking about something. If that is still not enough get help from a professional.
- Do not rush. Even if you have a busy schedule or if the other party is busy too, it should not be one of the reasons why you will sign a contract. We know you want to respect their time, but think about yourself first. It won’t do you any good to rush things. On top of that, you should be suspicious if the other party rushes you to sign the contract or avoids answering any of your questions regarding the contract. These are signs that they may be hiding something.
- Do your research. Before you even think of getting yourself involved in one, you should have knowledge about contracts. Knowing about contracts will save you from shame and will also keep you from being belittled or underestimated by the other party or parties.
- Come in pairs. Contract signing doesn’t always happen within a company’s premises, just like the usual setting for signing an employment contract. Some businessmen and other professionals would prefer meeting up at a certain place to have their business contracts signed. They do this to save the other party from the hassle of finding the other party’s office or company. This would really depend on who you are in transaction with. Bringing somebody close to you on your contract signing day will help you feel at ease.
- Don’t assume. Just like in love, assuming something will get you to the wrong direction. In contract signing, assuming will lead you to get yourself into a breach of contract. So if there is something you are not sure about or you think can be interpreted in different ways, ask about it. For the last time, don’t assume that it is what you think it is.
- Be mindful of every detail, but not to the point of being paranoid. You should be careful and mindful, but it doesn’t mean that you should suspect the other party for fraud or for planning on doing troublesome stuff against you. If you’re too paranoid to think, you might just end up signing the contract only to breach it later on. Then that would be something sad.
Breach of Contract Complaint
Breach of Contract Complaint Sample
Damage Measures for Breach of Contract
Types of Breaches of Contract
There are mainly four main types of breach of contracts that is recognized by the law: minor breach, material breach, fundamental breach, and anticipatory breach. Being able to distinguish the type of breach of contract helps you determine what kind of remedy to use for it. We will be discussing the four types of breach of contracts below.
- Minor Breach – Also called a partial breach. An example of this type of contract is when you hire a contractor to make and design your website to be launched on a specific day. The contractor was able to do as you requested and finished the job on time, but there were some errors in it. Since the contractor finished it on time, you can’t sue them for poor performance, but you can sue to get compensation for his errors or you can have the contractor correct the said errors.
- Material Breach – This type of breach is considered to be the most serious type. The party who failed to do their part in the contract will be asked to pay for the damages or provide compensation. This contract allows an individual or business to seek damages in court. Let’s use the contractor above as an example. After the contractor finished his work on time, his client refused to pay him. The contractor is supposed to collect his payment after the job is done.
- Fundamental Breach – A fundamental breach allows a party to stop the contract from being performed and sue for damages in court. Yes, this type of breach will also end up in court, just like the material breach. Say, for example, you rented a house only to find out that it is occupied by somebody else on the day that you moved in. You can talk to the landlord to do as you have agreed in the contract and let you get to the rented property; or stop the contract, bring the matter to court, and sue for damages.
- Anticipatory Breach – From the word anticipatory, it means that the contract has been broken or breached before it was even started. This breach is determined when the non-breaching party came to realize that the other party will fail to perform their part of the contract. The contract can be terminated and the non-breaching party can sue for damages even before the breach in the contract happens.
Getting familiar with the four main types of contract breaches will help you understand more about contracts and how they can be remedied.
Efficient Breach of Contract
Suing for Breach of Contract Sample
Breach of Contract Sample
Remedies for Breach of Contract
Remedies for Beach of Contract in Contract Law
Remedies for Breach of Contract Sample
The Damages Incurred in a Breach of Contract and Their Corresponding Compensation
Knowing just the types of breach of contract wouldn’t be enough. You also need to know about the damages incurred for breaching a contract, as well as their corresponding compensation.
First, let us define what damages mean in law. Damages are awards that usually come in the form of money that is paid to an individual or company as compensation for any loss or injury caused by the breach in the contract. Damages are often referred to as a remedy for a breach in contract. These damages include compensatory damages, liquidation damages, punitive damages, and nominal damages.
- Compensatory damages – The breaching party pays the non-breaching party to compensate the cost of the loss or the injury made by the breach. It consists of two types:
- Expectation damages – This is what the non-breaching party expects to receive based on the contract.
- Consequential damages – This will serve as the reimbursement for all other things or for indirect damages, like loss of profit in the business aside from the contractual loss.
- Liquidation damages – These damages are those that are specifically stated and agreed upon within the said contract.
- Punitive damages – These damages are intended to prevent or deter the breaching party from committing any contract breaches in the future.
- Nominal damages – It refers to an award where the non-breaching party did not incur any injuries from the breach, but the judge wants to show that the non-breaching party is right.
Other Remedies That Can Be Used in a Breach of Contract
Aside from paying for compensation, there are other remedies that can be used in a breach of contract, especially those that cannot be settled with the use of money.
- Specific performance – The breaching party is required to do or perform their part of the bargain that is indicated in the contract as mandated by the court. Although the breach has been done, the breaching party is still required to fulfill their duties and responsibilities in the said contract. An example is the delivery of goods that were not delivered and the other party has already paid for them. The performance mandate requires the breaching party to properly deliver the goods.
- Contract rescission – This remedy is done when both parties agree to cancel the contract and have a new one created instead. The old contract or the contract being disputed is rescinded or canceled and a new one may be formed so that the needs of both parties will be met.
- Contract reformation – The contract is rewritten so that it can better cater to the needs and demands of both parties, and so that it can reflect the true intentions of both parties. A valid contract can be reformed and this is usually done if there has been a mistake or misunderstanding during the formation or creation of the said contract.
There might be a lot for you to learn about contract breaches and how they can be remedied, but once you get a hang of it, you will find it definitely useful and efficient. Your chances of getting yourself into a contract breach will be lower compared to those who know nothing about it.
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