February 27, 2023
The best business advice anyone can give business owners is to get everything in writing and get it in a contract if possible. However, what happens when that contract is broken regardless of the original agreement around it? According to a commercial litigation lawyer from Brown Kiely, LLP, what happens next depends on just how the contract was broken:
Mutually Beneficial Breach of Contract
If both parties agree that they wish to break the contract, then that is all it takes. Of course, you will want to get this in writing from both parties and have them sign it. Things happen and times change. Mutually agreeing to step away from a contract happens more often than you might assume. It is one of the better legal outcomes that a business can expect when discussing breaches of contract.
This is when you do not receive what was agreed upon by a certain date. For example, if a company promises to clean your company’s building on a Monday but they show up on Tuesday, then this is a minor breach of contract. As the name suggests, these are small infractions of a contract that may not always make it to court because they are so minor.
This is when you receive something different than what was included in the original agreement. For example, your fashion company ordered one hundred cotton t-shirts but actually received one hundred polyester shirts. If the company you ordered from does not rectify the mistake, then they can be taken to court to either pay up or hand over the goods that were promised.
This is when the other side refuses to carry out the contract. If this costs your company money, then it can go to court. However, if someone signs a contract to work as your employee and then they never show up, that type of breach will not normally hold up unless there are extenuating circumstances.
This is when the other side announces ahead of time that they will not be participating in the contract. Again, if this hurts your company particularly financially, then this case can be taken to court.
The trick with contracts is to prove they are legally binding. While an oral contract is binding to an extent, it must be proven that someone said exactly what they said in order for it to hold up in court. In other words a video would be needed or several eye witnesses would be needed to prove that it was valid. However, if oral contracts are involved, there are certain dollar amounts and time limits on how much these contracts can be enforced for.
As for the other kinds of contracts, the court only awards money based on the amount of the contract. If you lost money because of the breach of contract, you will need to be able to prove that in a court of law and show that it was extremely damaging to the life of your company. Otherwise the courts will look to award you the amount for the contract itself. If you are facing contract issues and are in need of help, contact a lawyer near you immediately.