This guide will help you understand what a breach of contract is, the types of breaches, and what you can do if a contract is broken. It also explains how a breach of contract lawyer can help you solve problems. They can assist with legal actions, alternative dispute resolution, or court proceedings. We’ll also look at important concepts like terms of the contract, liquidated damages, and implied terms. Whether you are dealing with a breach of contract dispute or want to avoid future problems, this guide is for you.
1. What Is a Breach of Contract?
A breach of contract happens when someone doesn’t follow the agreement they made in a contract.
A breach can happen when someone:
Doesn’t do the job at all (non-performance): For example, they don’t deliver the product or service they promised.
Does it badly (defective performance): What they deliver isn’t as good as agreed.
Example: A company installs faulty equipment instead of high-quality machinery.
Does it late (late performance): They miss a deadline that was important in the contract.
Example: Delivering wedding cakes the day after the wedding.
Breaks specific rules (violation of terms): Not following special instructions in the contract, like keeping information private.
2. Types of Breaches of Contract
Knowing which type of breach happened helps you figure out what to do next.
Minor Breach
This is when a small part of the contract is broken, but the main purpose of the contract is still okay.
Example: A supplier delivers your order a day late, but it doesn’t cause serious problems for your business.
Material Breach
A material breach is serious and ruins the whole purpose of the contract.
Example: A company fails to deliver key materials, making it impossible for you to finish your project on time.
Anticipatory Breach
This happens when one side says they won’t be able to follow the contract before the time to perform has arrived.
Example: A contractor tells you they won’t be able to complete your project on schedule because they’re too busy.
Fundamental Breach
A fundamental breach is very serious. It destroys the entire agreement and leaves the other party with no choice but to cancel the contract.
Example: A delivery service fails to transport your goods entirely, and you lose business because of it.
3. Remedies for Breach of Contract
If a contract has been breached, the law allows the injured party to seek remedies. These remedies can help fix the situation or compensate for the damage caused by the breach.
Compensatory Damages
This is money paid to cover the losses caused by the breach.
Example: If a company fails to deliver goods, you could claim the cost of buying those goods from someone else.
Liquidated Damages
These are amounts written into the contract to cover specific breaches, such as late performance. However, they must be fair and reasonable, not excessive.
Example: If a builder finishes a project late, the contract might state they owe you £100 per day for the delay.
Specific Performance
This is when the court orders the breaching party to do what they promised. This is common for unique goods or services.
Example: If an artist refuses to deliver a painting you commissioned, the court might require them to finish and deliver it.
Rescission
This cancels the contract completely, so both sides are no longer responsible for their obligations.
Example: If someone lied to you to make you sign a contract, you might be able to cancel it.
Quantum Meruit
This allows someone to get paid for the value of the work they’ve done, even if the contract wasn’t completed.
4. What Should You Do If a Breach Happens?
If you think a breach of contract has occurred, follow these steps:
Review the Contract: Look at the terms of the contract to see what was agreed upon and what was breached.
Talk to the Other Party: Try to fix the issue directly by discussing the problem.
Consult a Lawyer: A breach of contract lawyer can explain your options and help you decide what to do next.
Consider Alternative Dispute Resolution (ADR): This includes methods like mediation or arbitration to solve disputes without going to court.
File a Legal Claim: If all else fails, you might need to take the matter to court.
5. Liquidated Damages vs. Penalties
Liquidated damages make it easier to handle breaches by agreeing ahead of time on how much one side will owe if they break certain rules. However, courts will only enforce them if they are fair and represent actual losses. If the amount is too high, it might be considered a penalty, which courts don’t allow.
Example: If a delivery company agrees to pay £500 for every day they are late, but the real loss is only £50, the court might say the £500 is a penalty and refuse to enforce it.
6. How Canko Law Firm Can Help
At Canko Law Firm, our breach of contract solicitors are experts in handling breach of contract claims. Whether you are bringing or defending a breach of contract dispute, we review the contract terms. We also examine any implied terms.
We specialize in contract law, offering expert legal advice on commercial contracts to ensure they are clear, fair, and legally binding. If a breach occurs, we help clients navigate their options, including the right to claim damages for any losses incurred.
We focus on cost-effective solutions like alternative dispute resolution but are ready to handle legal actions and court proceedings when necessary. Our goal is to protect your rights and ensure you get the best possible outcome
