What Is Involved in a Breach of Contract?

There are reasons why one party would not fulfill the terms of an agreed-upon contract. Unexpected situations are one example. These can include financial issues, delivery of goods, delays, refusal to complete the services, or failure to pay the amount agreed upon in a timely manner.

Under contract law, a breach occurs when a party has the absolute responsibility to perform and the responsibility/duty is not completed in accordance with the terms of the contract. The non-breaching party must be able and willing to perform the terms of the contract.

Essentials Necessary to File a Breach of Contract

To take action with a breach of contract, several essential elements are necessary. These are:

  • A contract and terms are in existence.
  • The plaintiff performed or tendered performance pursuant to the contract.
  • There has been a breach of contract by the defendant.
  • The plaintiff has suffered damages.

When one party claims a breach of contract by another, a judge must answer the following questions:

  • Was a contract in existence?
  • What were the requirements of each party involved with the contract?
  • Had the contract been subjected to modifications at any point?
  • Did the claim that a breach of contract occurred take place?
  • If a breach of contract did occur, was the breach material to the contract?
  • Does the breaching party have a legal defense to the enforcement of the contract?
  • What were the damages caused by the breach?

In the event of a contract being breached, the non-breaching party may ask that the court award damages. This is usually in the form of monetary compensation.

Damages may include compensatory or liquidated. Compensatory damages provide a party with a monetary amount that will cover and replace what was lost due to the breach of contract by the other party. Liquidated damages are those that are specified in a contract in the event of a breach of contract.

In some situations, monetary damages are not appropriate. Instead, the non-breaching party may request that there be specific performance rendered. This means the non-breaching party is asking that the court order the breaching party to perform the duties agreed to in the contract.

Another thing to consider is if the contract stipulates or the state law will allow a party to recover any attorney fees if they win the breach of contract lawsuit.

Missouri Breach of Contract

In Missouri, claims made involving a breach of contract are governed by three things:

  • Missouri common law.
  • Missouri's Uniform Commercial Code (UCC) Article II.
  • Other Missouri statutes.

The common law is developed by opinions of the Missouri Supreme Court and the Missouri Court of Appeals. The UCC, which was drafted for the purpose of creating uniformity in the laws controlling interstate commercial transactions, was drafted by a variety of national law organizations.

All states, with the exception of Louisiana, have adopted the UCC via statute. The goal of the UCC is to have the laws in each state in harmony with each other in practice, but in reality, UCC provisions vary from state to state as do the interpretations of the UCC by the courts in different states.

Missouri's Uniform Commercial Code

The UCC in Missouri applies to transactions in "goods" which is defined as anything other than money that is movable. Under the UCC in Missouri, a contract for the sale of goods amounting to $500 or more is not enforceable unless it is in written form and signed by the party that enforcement is sought against.

There are exceptions, such as the contract between merchants. For example, an oral contract for the sale of goods amounting to $500 or more is enforceable if one merchant sends written confirmation of the contract to the other merchant who does not send a letter objecting to the terms provided in the confirmation within 10 days from the time the confirmation is received.

Material Versus Minor Breach of Contract

A material breach occurs if one party's failure to complete their obligations results in the other party receiving something significantly different. Anything negligent, harmful, or willful to the other party is considered material. A minor breach occurs when one party receives what was agreed to in the contract but the breaching party fails to perform something specifically agreed to in the contract.

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