There are many remedies for non-performance of contract that a party can utilize in the event the obligations of a contract have not been met. When a contract is drafted, both parties are agreeing to perform what the contract specifies unless:

  • The parties agree to change the terms of the contract
  • The action of the party who has deviated from the contract is accepted implicitly either by an action or inaction of the other party

If the deviation from the original term of the contract has not been accepted and is deemed to be serious enough to have altered the intended result of the contract, the party who deviated could be held responsible for breaching the contract.

While a party who does not perform their obligations is considered a breach, a party interfering or preventing a party from completing their contract duties could also be held in breach of contract. While these types of breaches for non-performance are fairly straightforward, the situation can become more complex in the event there is an argument over things such as:

  • The quality of materials
  • The timing of the work

When a breach of contract occurs, the non-performing party can be subject to a claim for damages by the other party in the contract. If a contract has been breached by one party, the non-breaching party will no longer be bound by the obligations outlined in the contract.

To be successful at claiming damages, the non-breaching party will be able to support their claims for a breach if they made sure to perform all of the obligations required of them by the contract up until the breach by the other party occurred. They also must have been sure not to do anything that could be considered interfering with the contract or making it unreasonable for the other party to have accomplished.

When a claim does occur, the non-performing party will most likely try to find excuses for their conduct, so it is important to have a record of the aggrieved party's adherence to the contract and their obligations laid out in it.

Breach of Contract in Court

Since the performance of a contract can be difficult to categorize, courts have begun to see these cases in terms of "breached" and " not breached" to be able to make a fair judgment. The doctrine of "substantial performance" can also prevent a party that has mostly fulfilled their obligations stated in the contract from suffering a major loss in a claim due to falling short in an area of the contract that did not affect the overall essence of the contract or its intention.

The court may limit cases to those where a true breach has occurred, causing the contract to not be fulfilled, because the court would otherwise be swamped with cases if every customer filed a claim for damages for dissatisfaction or imperfections in services. If the party fell short of perfection but substantially performed the duties underlined in the contract, they have the right to sue for payment.

Though it is possible for the dissatisfied party to win an adjustment to the payment, if the party fails to perform the contract fully and affects the essence of the contract, they cannot sue for payment even if the failure was unintentional.

The Right to Terminate a Contract for Non-Performance

A party has the right to terminate a contract for non-performance and sue for damages as long as the non-performance affects the core of the contract agreement. Even though parties are expected to fulfill all of the terms of the contract, non-performance does not always constitute a violation of a contract.

Under contract law, small businesses and other parties are only afforded the right to void a contract as a last resort measure. Additionally, small businesses can often remedy the non-performance of a contract without having to cancel the contract or take their case to court.

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