Breach of Contract Examples: Everything You Need To Know
Breach of contract examples can help when breach occurs. A breach of contract is when the terms of an agreement between parties are broken by one parties.3 min read
Updated October 21, 2020
Knowing breach of contract examples can help you in the event that a breach occurs. A breach of contract is when the terms of an agreement between two or more parties are broken by one of the parties. This includes obligations that aren't completed on time, as stated, or at all.
What Happens After a Contract is Breached?
If a breach of contract happens, you can try to enforce the terms upon which you agreed, ask for money to recover damages, file a lawsuit, or ask a mediator to find a way to fix the issue.
Remedies for a Breach of Contract
If you experience a breach of contract, you can get a remedy from the breaching party. The most common remedy is payment of damages, which includes:
- Compensatory damages
- Punitive damages
- Nominal damages
- Liquidated damages
If damage can't be resolved legally, you can ask for specific performance, which is when the breaching party is forced by the court to perform the terms. If you gave something beneficial to the breaching party, you can cancel the agreement to make all terms void and sue for restitution.
Type of Contract Breaches
Breaches are typically placed under one of two categories:
- Actual breaches: when one party refuses to fully perform the terms of the contract.
- Anticipatory breaches: when one party lets you know the terms of the agreement will not be completed.
Contract breaches can be considered minor or material as well. A minor, or partial, breach happens when you don't receive the item or service by the due date. A material breach happens when you receive something other than what was placed in the agreement.
Breach of Contract Examples
- Scenario One: “I had a local company build me an outdoor woodfire oven. Because its prices looked reasonable, I paid the deposit, and a representative came to my house to build it. It looked amazing, and I paid off the balance soon after. My family came over for dinner, so I decided to try it out. However, I realized the workmanship was poor because the bricks were placed without mortar, and the chimney was plastic. What should I do?”
- Advice: Negotiate first, and if that doesn't work, try to get a lawyer who can send them a letter to avoid a lawsuit.
- Best Option: Filing with the local small claims court to help resolve the issue between you and the breaching party if negotiation doesn't work.
- Resolution: “After speaking to a lawyer, we went with the letter first. After being sent with details of the possibility of a lawsuit being filed, the company replaced the oven with a new one that works properly.”
- Scenario Two: “I'm the owner of a small car dealership and sold a car to an individual who had no debit or credit card. After various excuses as to why he couldn't do a bank transfer, I accepted a check. Of course, the check bounced, and the purchaser won't answer any of my calls or emails.”
- Advice: Always negotiate first, but if this fails, have a lawyer send the party a letter before filing a lawsuit.
- Best Option: Litigation, where a letter will first be sent. If there is no response, a complaint will be sent to the state court.
- Resolution: “After my lawyer sent the purchaser a letter of demand and received no response, he filed a complaint with the state court. It was served to the purchaser, which made him contact my lawyer to arrange payments on his balance. My lawyer removed the complaint after payment was fulfilled.”
Breach of Contract on Sales of Goods
This type of breach happens when a buyer and seller have a purchase agreement, which is conditional or unrestricted. Repudiation, which is similar to anticipatory breach, happens when you are aware the other party is not going to fulfill the terms upon which it agreed. The person must specifically state he or she won't be following through with the terms of the contract. Repudiation by transfer happens when the seller gives a third party the purchase contract to fulfill his or her part of the agreement.
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