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When does a business have a legal claim for breach of contract?

On Behalf of | Sep 16, 2015 | Contract Disputes |

Miami residents make deals with one another on a daily basis, whether they realize it or not. Compromise is an effective tool not only in one’s personal life, but also in the business world, where it plays a key part in getting things accomplished. However, agreements can also form the basis of disputes when circumstances happen after the fact that calls into question the original understanding between the parties.

One of the biggest sources of litigation between businesses involves a contract dispute. Companies often enter into contracts with one another, whether it be to provide some service or good, or to enter in some other arrangement that appears beneficial to both sides. Things can turn very quickly when one of the parties does not appear to be living up to its end of the bargain.

A key question when it comes to contract law is what obligation has been broken by that party and how consequential the breach is to the agreement. There are often many components to a contract, not all of which may be deemed essential to the basis of the agreement if it is not performed. Under general contract law, a party can typically be held accountable only if it committed a material breach of the agreement, meaning a breach that is significant enough to warrant legal relief.

If a material breach is present, the business may have a legal claim for breach of contract against the other person or entity who committed the breach. The business might then choose to try to compel the other party to fulfill the original promise of the deal, such as providing the service or good that has yet to be provided. Alternatively, the business might choose to sue for money damages, whereby compensation will be awarded based on the harm that was caused to the non-breaching party. The availability or wisdom of the remedy to pursue will depend on the circumstances of each case.

Source: The Florida Bar, “Legal and binding contracts,” accessed on Sept. 12, 2015