When you form a professional relationship with a partner, client or vendor, you will create a contract. The contract’s purpose is to outline each party’s responsibilities and steps to take if one party doesn’t live up to the terms outlined.
If one of the parties in the contract doesn’t meet the contract terms, it’s called a breach of contract. There are two types to know about, a minor breach and a material breach.
A material breach of contract
A material breach of contract occurs if one party doesn’t perform the obligations that are outlined in the contract or if the other party receives something significantly different than what has been specified.
An example of this will be if the contract specifies you are purchasing a box of men’s pants but receive women’s dresses. In a material breach, the party that did not cause the issue is no longer required to meet the terms of the contract and can seek resolution for the breach that occurred.
A minor breach of contract
A minor breach of contract occurs when the breaching party does not fulfill some part of the contract, but the other party still receives the service or item outlined in the contract. Unless the contract states that time is a crucial element or provides a specific date for goods to be delivered, delays by one party would only be a minor breach. In these situations, the non-breaching party must meet their end of the contract but can possibly receive damages.
Understanding breach of contract situations
If you are involved in a situation where someone breaches a contract you have in place, you have rights. Knowing the type of breach that occurred and your responsibilities is important.