Most of us use contracts every day in both life and business. A valid contract legally binds the parties to fulfill specific duties.
Failure to perform those obligations results in a breach of contract. For example, if a restaurant orders and pays for 100 eggs and a seller delivers them in the agreed-upon time frame, the contract is fulfilled.
However, if the buyer fails to pay or the seller delivers only 50 eggs—or worse, 100 eggs but 20 are broken—one party may have breached the contract. This is a trivial example, but you get the idea.
There are several types of contract breach. In this blog post, our Ohio contract lawyers will walk you through the types of breach of contract you may encounter and how a knowledgeable business law attorney can help you navigate if one party to your contract fails to deliver.
Breach of Contract Examples
Contracts are legally binding agreements that require the parties to perform the specific duties listed in the document.
When one party fails to meet any of its obligations under the agreement, a breach of the contract occurs.
Reasons for breaches of contract can include:
- Failure to complete contractual obligations on time;
- Inability to comply with certain, specific terms of the contract; and
- Complete failure to perform.
Four common types of breaches of contract could affect you and your business. A skilled breach of contract lawyer can help you navigate some of these complex areas of contract law.
Here, we will discuss the four common types of breach of contract. Remember, in Ohio, you will need to bring your claim within four to six years of a breach of contract, so speak with Bensinger Law today.
Material Breach of Contract
In the event of a material breach of contract, a party has failed to perform the essential terms of the contract.
This could be the non-performance of a service or failure to deliver a product after receiving payment. Put another way, a material breach goes to the very core of what the contract was about.
A material breach almost always discharges the non-breaching party from its obligations under the contract.
A material breach of contract also typically provides grounds for the non-breaching party to sue the breaching party for damages.
Minor Breach of Contract
In contrast, a minor breach of contract is when one party partially performs under the contract but does not do everything they are supposed to do. In other words, there is some kind of failure to perform, but they do not violate the entire contract.
An example of this would be when a restaurant contracts with a vendor to provide 20 pounds of butter for their weekly baking needs.
Instead of providing the brand specified in the contract, Brand A, the vendor provides an equivalent brand, Brand B.
The restaurant still received 20 lbs of high-quality butter but received a different brand. The contract was technically both breached and fulfilled.
However, the restaurant might not have grounds to sue for damages unless Brand B was substantially different and their baked goods—and thus bakery profits—suffered as a result.
Anticipatory Breach of Contract
An anticipatory breach of contract occurs when, before performance is due, one party tells the other party they will not perform their obligations.
Consider the example of a restaurant that orders a new set of tablecloths. Months before the order is due, the tablecloth maker calls the restaurant and says, “Sorry, we will be unable to deliver your order.” This would be considered an anticipatory breach.
In cases of anticipatory breach, a non-breaching party generally has two options. They can wait until performance is due to see if the other party will change its mind and be able to deliver.
They can also immediately pursue sue damages, including equitable damages (if available), which could include forcing the other party to perform.
Actual Breach of Contract
The term “actual breach” of contract refers to a wholesale failure to meet the obligations stated in a contract at the time of performance.
When referring to an actual breach of contract, it means the failure has occurred—it is not anticipated.
Actual and anticipatory breaches of contract are temporal terms to help parties understand when a breach occurred, while material and minor breaches of contract are terms to help parties understand the severity of a breach.
How Bensinger Legal Services Can Help
Aaron Bensinger helps clients with breach of contract, personal injury, and civil litigation claims. He strives to offer unmatched representation in the Northwest Ohio region with his client-centered approach.
His extensive experience and familiarity with contract law enable him to meet his clients’ most pressing legal needs.