4 Common Types Of Contract Breaches To Watch Out for

A contract is a legally binding document signed between at least two parties. Once a contractual agreement is signed, the parties must fulfill their obligations under the contract.

When a party fails to follow through with the terms of the contract, the other party may be able to file a breach of contract lawsuit. There are four common types of contract breaches resulting from a party’s failure to fulfill contractual obligations.

If you are considering filing a breach of contract lawsuit or you are the party that is unable to perform your obligations under a contract, speak with Atlanta breach of contract attorney Stacey Carroll to discuss your particular case.

What Are the Most Common Types of Contract Breaches?

There are four common types of contract breaches:

1. Minor breach (partial breach). A party can be sued for a minor breach when they violate only a portion of the contract but fulfill other obligations under the contract. For example, let’s say John hires a company to do a certain job. Even though the job is completed on time, the company fails to complete the job as agreed upon. While John cannot sue the company for non-performance, he may be able to sue the company for the partial breach of contract if the company fails to remedy the problems.
2. Material breach (total breach). When a party fails to perform its contractual obligations detailed in the agreement, the other party may be able to sue the breaching party for a material breach. A breach is considered “material” if it is significant. The non-breaching party can sue the breaching party for monetary and other damages because it did not receive benefits from the contract.
3. Anticipatory breach (anticipatory repudiation). If a party to a contract is reasonably led to believe that the other party will not be able to fulfill its contractual obligations on time, they can file an anticipatory breach of contract lawsuit. For example, if John sells his company to ABC Corporation with an earnout payment required by December 31, but ABC Corporation informs John prior to December 31 that it will not pay him his earnout, an anticipatory repudiation has occurred.
4. Fundamental breach. Last but not least, a party can be sued for a fundamental breach of a contract when they fail to fulfill contractual obligations that are so critical to the agreement that the other party cannot complete their end of the deal. The non-breaching party can recover damages and cancel the contract.

What Damages Are Available for a Breach of Contract?

The damages that may be available when suing a breaching party for breaking the terms set out in a contract depend on:

1. The type of the contract breach; and
2. The severity and consequences of the party’s failure to fulfill their obligations.

Aside from monetary (compensatory) damages, the non-breaching party may be entitled to:

• Punitive damages
• Restitution
• Specific performance

Consult with a breach of contract attorney to discuss your specific type of contract breach and determine what damages are available in your particular case. Reach out to Carroll Law Firm by calling 404-816-4555 or complete our contact form.