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How Does a Breach of Contract Affect Small Businesses?

How Does a Breach of Contract Affect Small Businesses?

If you are a small business owner, you more than likely understand the importance of a contract. A breach of a contract can be followed by a lot of frustration and ill-feelings. It can result in a waste of time, resources, and money. Understanding the ways in which a breach of contract can impact a small business can help you better determine whether or not to file suit. Our legal team at Fitzpatrick Mariano Santos Sousa P.C. explains what you should know.

Not all breaches of contract are the same. There are four main kinds of breaches:

Minor Breach – These are considered a partial breach. For example, if you enter into an agreement with someone and they complete it, but not up to your standards, you cannot follow suit due to a lack of performance. You might, however, be able to sue for monetary damages and demand it be corrected.

Anticipatory Breach – This allows for one party in the agreement to claim that the contract has been broken based on the fact that the other party will not execute his or her end of the deal within the time allotted in the agreement. For example, if you paid someone to paint your house by April 1st and he or she still hasn’t begun by March 30th, you can potentially collect monetary damages since the job will not be completed within the allotted amount of time.

Fundamental Breach – This is a violation of contract that allows the wronged party to stop the performance of the contract and sue for damages. For example, if you entered into a contract to move into an apartment but on the move in day your apartment had already been rented out to another person. You could sue for damages and have the landlord uphold his or her original agreement. These breaches are likely to end up in court.

Material Breach – This is considered one of the most serious breaches of contract. It is the failure to complete one’s duties or uphold one’s end of the deal. If you complete a job and are not paid for that job, the party that refuses to pay is in violation of their agreement and not upholding their end of the deal.

If you are facing a dispute over a breach of contract, contact Fitzpatrick Mariano Santos Sousa P.C. today!