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4 kinds of contract breaches 

On Behalf of | Jun 19, 2024 | Business Contracts |

Contract breaches can cause business disputes. Many business relationships rely on contracts. A detailed business contract can outline expectations and responsibilities from each party involved in a transaction, including the type of product or service being provided and the date a service or product is provided.

When a contract is breached, there are typically a few common causes. Here is what you should should know:

1. Material breach

A material breach often has a large effect on the non-breaching party. A material breach occurs when a product or service is not provided. The product or service provided may have also been entirely different from what was outlined in a contract. This can have direct and indirect effects on the non-breaching party. The non-breaching party can hold the breaching party liable for damages. 

2. Minor breach

A product or service outlined in a contract may have been provided by a party. However, the party may have still breached the contract because an obligation was not met. This is typically called a minor breach because it can have less devastating effects than a material breach. The non-breaching party could pursue a remedy if the minor breach did cause damage. 

3. Anticipatory breach

In some cases, a breach may not have happened yet, but it is clear that an obligation will be left unfulfilled. An anticipatory breach often occurs when a contracted party makes it clear that an obligation will not be met. 

4. Actual breach 

A product or service may not be fulfilled and the terms of a contract may have already passed. This may be called an actual breach. An actual breach can also happen if a product or service is provided poorly or incompletely. 

Non-breaching parties can reach out for legal help to discuss how a contract breach can be remedied.

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