A contract exists when on or the other party has made an offer, the offer has been accepted, and the parties agree on the terms (a “meeting of the minds”). There must be mutual consent to the contract, appropriate “consideration” (usually expressed as the amount of payment to be made by one party to the other for actions, services, or goods) and “execution” of the contract, meaning both parties sign a document or take some action that indicates they expect the agreement to be binding.
Contracts must be legal: a contract made for illegal purposes isn’t binding, and parties to contracts must have the capacity (the mental acuity) to understand the agreement.
There are circumstances you should know that constitutes a violation of that agreement, which lawyers call a “breach of contract.” Learn to recognize the four types of breach of contract violations.
Material Breach
A material breach of contract occurs when one party doesn’t get the result they agreed to in the contract. If you ordered filet mignon and lemon chicken from a caterer as the entrées for your wedding reception, and you get salmon and pork, then a material breach has occurred.
When one party doesn’t get the benefit they expected from the contract, they can disregard their part of the contract and file a lawsuit seeking compensation for damages the breach caused.
Another type of material breach can occur if one party misrepresents themselves, their products, or their services in the contract. Deceptive trade practices can nullify a contract, constituting an actual breach, and the party harmed by the deception can sue for damages.
Actual Breach
While a material breach may involve seriously substandard work or services, an actual breach happens when one party doesn’t do anything required by the contract. The other party can disregard the contract (refuse payment) and sue for damages caused by the breach.
Anticipatory Breach
This type of breach of contract occurs when one party flat-out says they have no intention of honoring their obligations under the contract. It can also happen when it becomes obvious to one party that the other signer of the contract can’t or won’t perform their obligations.
Minor Breach
A minor breach of contract is a situation where you get most of what you agreed to, but some minor and relatively insignificant detail wasn’t right; perhaps you got the right entrées for your reception, but there weren’t enough extra servings. Or maybe your painter was supposed to start a job in the morning, and they came in the afternoon instead, but still got the job done on time. Minor breaches are inconveniences that may create damage without completely failing to perform the terms of the contract.
An experienced business attorney will evaluate your case and advise you about whether it may be worth it to attempt to salvage the contract, or if suing to enforce the contract’s terms or seek monetary compensation for a breach is the best path to take. In the Texas panhandle, that firm is the Northern Law Firm. If you’ve been damaged by a breach of contract, call us at 806-374-2266 today.