What happens if a business breaches my contract?
Contracts are an essential part of doing business in Florida, they outline the terms and conditions of the agreement between parties, and make the commercial world go round. However, not all parties always abide by the terms outlined in the contract, which results in a contract breach. A contract breach occurs when one or both parties fail to fulfill their obligations outlined in the agreement. In many cases, this will lead to commercial litigation between parties in a Florida Court of Law. This article addresses the types of contract breach in Florida.
But first, do you have a valid contract or agreement? In Florida, a valid contract requires the following essential elements:
- An offer made by one party,
- An acceptance of that exact offer by another party,
- Consideration – what is being given in exchange for the contractual promises,
- Clear terms and conditions which leave no ambiguity,
- The capacity of the parties to enter the contract, and
- That the contract terms are legal.
A contract can be oral or written and either form of contract can be breached. Generally, contract breaches fit into one of the following general categories:
A material breach is a serious breach that affects the fundamental purpose of the agreement. In other words, it’s a breach that goes to the very essence of the contract. For example, if a seller fails to deliver goods or services as promised, it constitutes a material breach. Remember that a mere delay in contract performance may not be material unless a “time is of the essence” clause is included in the terms of the contract. General contractor agreements often contain clauses that deal with time delays and remedies for delay. If you suffer a material breach, further performance under the contract is excused. You are entitled to terminate the contract and seek damages which put you in the same position as you were immediately prior to making the agreement.
A partial breach occurs when one party fails to fulfill some but not all their obligations as outlined in the contract. For example, if a contractor fails to complete a project on time but completes it later, it constitutes a partial breach (but see above). In such a case, the other party can sue for damages but can’t terminate the contract.
An anticipatory breach, anticipatory repudiation, or constructive breach, occurs when one party notifies the other that they won’t be able to fulfill their obligations as outlined in the contract, are unwilling to do so, or make it impossible to perform the contract. Here, there is no actual breach of contract. In such a case, the non-breaching party is relieved of its duty to further perform under the contract and can bring a civil action for damages. As you can imagine, you must be quite sure of this form of breach, since if you rely on this to stop performing your end of the bargain, you can be sued for breach of contract.
In conclusion, contracts are essential for outlining the terms and conditions of an agreement between parties. However, not all parties always abide by the terms outlined in the contract, which results in a contract breach. If you’re dealing with a contract breach in Florida, you should consult a business attorney to discuss your rights. Many times, contract disputes lead to commercial litigation so it is important to seek legal advice sooner than later to understand your options.