The status of your business’ contracts is no doubt a great concern to you. Both you and your partner fulfilling your respective terms will likely benefit you both. What happens, however, if and when your partner fails to live up to its obligations?
Like most of those that come to see us here at Slinde Nelson, you would probably classify such a failure as a “breach of contract.” You should know, however, that the law recognizes different forms of breach of contract. Your ability to collect damages due to a contracted partner’s breach depends on which of these your situation falls under.
Material breach of contract
Per information shared by the Judicial Education Center, legal officials define contract breaches as either “material” or “minor.” In the case of the former, whatever consideration (the benefit you derive from the contract) your company ultimately receives must be substantially different from what you anticipated. That can be either nothing at all or something so little or different compared to what you agreed upon that it essentially offers you no benefit. In such a scenario, you may be able to seek compensation for breach of the entire contract.
Minor breach of contract
A minor breach of contract occurs when, despite unforeseen issues in the delivery of your contract consideration, you still ultimately receive it. One of the most common examples of a minor breach is a delay of goods or services. You might have an agreement to receive something from your partner within a certain time frame, yet your partner does not meet that deadline. No matter the reason for not meeting it, you may still only seek damages related to the delay if your partner ultimately delivers what it promised.
You can find more information on dealing with contractual issues throughout our site.