A contract, verbal or written, is an essential element of any business deal. Last week we discussed the three essential components every Florida business contract must have. Today, we’re going to touch on what happens when a valid contract is present but obligations are not fulfilled as promised.

A savvy businessperson should demand a valid, executed contract prior to performing any services or offering any products. However, despite the existence of a valid contract, there will be times when a party fails to fulfill their obligations as promised.

Generally, a valid contract will conclude in one or two ways: 1) all parties to the contract will perform their duties as agreed without any problems; or 2) one or more parties will not perform or fulfill their obligations, causing a breach of the contract. The latter can result in substantial damage to the party or parties injured by the breach.

Types of Breaches

In Florida, there are basically two types of contract breaches – minor and material. A minor breach may involve failure to perform a specific term of the contract, and usually does not result in any significant damage to either party. A material breach typically occurs when a party totally fails or insufficiently performs as per the agreement. This type of breach can be so severe in nature that it terminates the entire contract, and causes substantial, irreparable damage to one or more parties.

Damages for Breach of Contract

When a breach of contract occurs, regardless of its severity, the injured party can recover damages and other legal remedies through the court. Said party can also be discharged from performing any further duties included in the contract. In essence, a breach of contract terms by one party terminates the valid contract, which in turn releases the injured party from its contractual obligations.

There are three types of damages that can be caused by minor or material breaches. Those damages include monetary damages, liquidated damages, and/or specific performance. Depending on the nature of the breach, an injured party can be entitled to recover one or more of these damages.

Whether your company has been injured by a breach of contract, or is being accused of breaching a contract, you should contact the Florida contract attorneys at Schecter Law to discuss legal remedies you’re entitled to or defenses you can rely on.

Tags: breach of contract, damages

This entry was posted on Monday, July 13th, 2009 at 1:33 pm and is filed under contract law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.