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What Happens After a Breach of Contract?

Contracts are a vital part of business. When an agreement is made, putting it into writing via a contract makes it legally enforceable and protects both parties involved should the other decide not to fulfill their obligations. But what happens when one party decides they don’t want to adhere to the terms of the deal anymore, no matter what their reasoning? Legally, it is said that the contract has been “breached,” or “broken,” and therefore the non-breaching party then has legal grounds to hold the other party responsible. Here’s what to expect if an employment contract is breached.

Four Types of Breaches

To learn about what happens when a contract is broken, it’s important to know the four different ways in which you can break a contract. Not all breaches are created equal, and how a contract is breached will influence what happens after as much as what happened because of the breach.

Material Breach
Material breaches are arguably the most serious form of a contract breach, and refer to when one party fails to perform the duties as they are set in the contract. In these instances, the person who has been victimized by the breach of contract could potentially hold the other party liable for damages.

Fundamental Breach
A fundamental breach allows you to stop the performance of a contract as it currently exists because one party failed to follow the terms of the deal. For example, if a business signs an agreement to be an exclusive distributor of a product and then receives their first shipment only to realize that their competition signed the same deal the day after, they could then hold the manufacturer liable for a fundamental breach of contract.

Anticipatory Breach
When it becomes evident that one party will not be able to fully adhere to the terms of their contract, the other party may breach it in anticipation of the preliminary breach. For example, if you retain an independent contractor to build you a website by a certain day and they haven’t even started the project the day before, you can anticipate the job will not be done in time.

Minor Breach
These breaches don’t usually end up in court because they’re often resolved quickly as they’re just minor strays from contract terms. To use the previous example, say the website is done on time, but lacks quality and has numerous errors, you could potentially use your contract to hold the developer responsible and force them to make the necessary corrections.

In each of these cases, when a contract is breached, the victim of the breach could hold the other party responsible and liable for damages. These damages include coverage for losses, possibly even including punitive damages, and even attorney fees as a result of misconduct.

Have you been harmed by a breach of contract perpetrated by your employer? Let an Atlanta employment lawyer help you hold them responsible! Call Buckley Beal, LLP today at (404) 471-3725 for a case evaluation!
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