Tuesday, June 9, 2015

What Is Considered A Breach Of Contract

It is illegal to back out of a contract after it has been signed.


A breach of contract essentially means that one party fails to meet the terms and conditions of a contract, and as a result, the other party is owed damages. The court can award compensatory damages, specific performance, attorney fees and legal costs as well as punitive damages, which are meant to punish the breaching party.


Examples of Breach of Contract


A variety of scenarios exists in which a breach of contract may take place. If an employer offers a candidate a guaranteed raise within one year but fails to comply with the terms and conditions of the employment contract, the candidate can sue for breach of contract. If a buyer purchases real property and the seller fails to make the property available to the buyer, the buyer can sue for breach of contract.


Cause of Action for Breach of Contract


If there is a total breach, the wronged party may file a lawsuit to try to collect damages caused by the breach. To make out a cause of action for breach of contract, you must disclose the terms and conditions of the contract and provide an original copy of the contract. It is necessary to specify the type of contract; for instance, written, oral or implied by conduct.


Prove Your Case


To prove your case, you must show the other person deprived you of the true purpose of your deal. If the agreement is "irreparably broken," it is considered a material breach. Courts often look to guidance from a legal guide known as the Restatement (Second) of Contracts, as well as to landmark court decisions regarding contract disputes, when determining whether and to what extent you are entitled to damages.


Considerations


Courts analyze whether the breaching party has acted to fulfill its end of the deal. If a contract is near completion, the court may limit the damages you are entitled to collect. If there is still time for the breaching party to fix the problem, such as offer security for a promised payment, or some other reasonable assurance that the deal can be fixed, the court may order the breaching party to perform his obligations under the contract and not award compensatory damages.

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