A breach of contract can have a significant impact on a business or a transaction such as a real estate transaction. In the real world, problems arise such as delays, financial challenges and other problems that may impact the completion of a contract and a contract relationship. As a result, it is important for businesses and parties to business transactions, such as a real estate transaction, to understand what breach of contract is and what they can do if a breach of contract occurs.
Contracts are essentially agreements that outline obligations and rights of the parties that are a part of the contract. A breach of contract occurs when a party fails to perform their obligations under the contract. A breach of contract can include when one party fails to timely perform, fails to perform according to the terms of the contract or does not perform obligations outlined in the agreement at all. Contract breaches are categorized according to the nature of the breach which impacts the remedies available to the non-breaching party so it is useful to be familiar with what categories a breach may fall into.
Different remedies may be available when one party has breached a contract. It may be possible for the non-breaching party to obtain damages, pursue specific performance to enforce contract terms of the contract or rescind the contract which is a cancellation of the contract that may also include damages as a remedy. The type of remedy available depends on the nature of the breach of contract and the goals of the parties to the contract.
It may be possible to negotiate a resolution to a contract dispute in some circumstances but other circumstances may require different remedies available to the non-breaching party. Because of the significant impact a breach of contract can have on a business or transaction, it is important for parties to understand their options and how to respond if they are faced with a contract dispute.
Source: Smallbusiness.findlaw.com, “Breach of Contract and Lawsuits,” Accessed July 19, 2017