How To Handle A Breach Of Contract

Posted on October 25, 2016 · Posted in business litigation, contracts, News

In a perfect world, once an agreement is entered, both parties would fulfill their ends of the contract and there would be no conflict or disputes. This world is not perfect though and often disputes do come up. Due to project delays, financial issues arising and contracts not being fulfilled, one side of an agreement may be in breach of contract. This essentially means they can’t or won’t fulfill their end of the agreement or were unable to fulfill it in the time frame agreed to.

Legally, the party who is unable to fulfill their end of the agreement is in breach. This happens when a party fails to perform on time, fails to perform the task agreed to, or does not perform in accordance to the agreement. A breach of contract may be categorized as material or immaterial.

In an immaterial breach of contract, if Party A was responsible for delivering an item to Party B and Party A was late, while there would be a breach of contract, it would be immaterial and Party B would likely not have to pay monetary damages.

However if the contract said the delivery must occur on at a specific date and time and it wasn’t, the breach could be deemed material and Party A would likely be liable for more severe damages.

If a contract is breached, one or both parties may seek to have the agreement enforced or may attempt to recover damages caused by the breach. When informal attempts to resolve a breach fail, usually parties proceed to a lawsuit. In Virginia or Washington D.C., claims of $5,000 or less will likely be heard in small claims court.

Although the parties may choose to head to court to resolve the issue at hand, this is not the only way to remedy the situation. If both parties agree, a mediator may review a contract dispute or the parties may agree to binding arbitration of a contract dispute.

Usually, the party in breach must remedy the situation by paying damages, by cancellation or restitution or with a specific performance.

If you are named in a breach of contract lawsuit or need to bring a breach of contract lawsuit against another party, you will want to have the business and employment law expertise of the attorneys at Doumar Martin PLLC.