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When a first breach of contract terminates a contract

On Behalf of | Jan 10, 2019 | Contract Disputes |

Contracts are important for businesses in Florida. Contracts state the obligations of both parties to a transaction. This is important because it gives both sides assurances about how the other side will proceed and allows them to plan accordingly. It also gives both sides the ability to later protect their rights if the other side breaches the contract. This is usually done through a lawsuit for damages the party suffered due to the breach.

One seemingly basic tenant of contract law is when one person fails to live up to his side of the agreement, the other person no longer must adhere to his side of contract either. This is known as the first breach doctrine. While it may seem simple, certain elements must be met before the non-breaching party can walk away from the contract.

These elements are: there is, in fact, a breach of contract; the breach is material or substantial; the provision that was breached is a dependent clause; and the non-breaching party must have not waived their right to enforce the breach.

A material breach means that it pertains to an essential part of the contract and will cause significant harm to the non-breaching party. A dependent clause is one that the parties need to occur in order to perform their duties. Whether the party waived the ability to enforce the breach can be determined through actions or words, and usually means that the parties continued acting under the terms of the contract as if the breach did not occur.

Companies in Florida enter into contracts every day. These contracts can be very lucrative for both parties involved; and when there is a breach it can cause significant economic damages to the non-breaching party. In many instances the contract is terminated when there is a breach, but in order to recover damages the non-breaching party may have to initiate a breach of contract lawsuit. These can be very complicated matters and experienced attorneys are be able to guide one through the process.