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4 kinds of contract breaches

On Behalf of | Nov 4, 2022 | Commercial Law

There are a lot of minor details and confusing language in contracts, but these legal documents hold a ton of power. Without a strongly-worded contract detailing your legal rights, expectations and obligations, your business would likely suffer. Knowing what you and other parties are expecting from each other not only helps your business but keeps other parties from stepping outside their responsibilities.

No matter how strong of a contract you think you have, the parties your business works with may not feel like finishing their duties laid out in a legally binding document. When this happens, or other situations arise, you may be facing a contract breach. Here’s what you should know:

What kind of contract breach are you facing?

A contract breach happens when one or more parties fail to fulfill their duties established in a contract. A contract breach can severely hurt business. There are four kinds of contract breaches: actual, anticipatory, minor or material.

Contract breaches are, frequently, either considered actual or anticipatory. An actual breach occurs when a party fails to fulfill their duty after a due date, leaving it partially incomplete. An anticipatory breach happens when it’s clear that a party won’t fulfill their duty by the due date.

Take, for example, your business may claim there was an anticipatory breach if the contracted party is closing in on their due date, yet hasn’t done any work. While an actual breach would happen if the contracted party did their work but left expectations on the contract unfinished.

Alternatively, a contract breach may be considered minor or material. A material breach happens when a contracted party seemingly fulfills their contract but presents something different than requested.

A minor breach, or partial breach, occurs when only part of a contract is fulfilled. An example of a minor breach could involve a contracted party finishing their job to the letter, but it was a day late.

Leaving a contract breach alone may only worsen damages in the long run. You may need to know your legal options when seeking a resolution.