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3 ways a contract could be breached

On Behalf of | Jan 31, 2024 | Contract Disputes

A contract breach can be very harmful to your business. You signed the contract with another business owner, a supplier or some other type of entity. You expect them to uphold their end of the deal, and it could cause your company significant financial harm if they do not.

Unfortunately, contracts are breached all the time. It’s important to understand how this happens and what steps you can take if it happens to you. To start, here are three different ways that the breach could occur.

1. An anticipatory breach

In some cases, the other party may talk to you in advance and say that they’re not going to uphold the contract. Maybe they simply refuse to abide by the terms. This sometimes happens when the other party got confused or wasn’t even sure what they were signing in the first place, even though they should have known.

2. A minor breach

A minor breach is when the contract isn’t fulfilled perfectly, but the main stipulations are still met. For instance, a parts supplier says that they will send you 1,000 units by Monday. They do send 1,000 units, but they show up on Wednesday. This could still harm your company if it means that your own production slows down and you’re unable to meet demand.

3. A material breach

A material contract breach is when things go entirely wrong and you don’t get the correct products. Maybe nothing is shipped to you at all. Or perhaps you get the wrong items. Say that you ordered 1,000 graphics cards because you assemble computers, but you received 1,000 sound cards.

These are just a few examples of how a contract could be breached. If this happens to you and your company, take the time to look into your legal options to pursue justice.