Breach of Contract

Navigating Breach of Contract Disputes

Contracts help two or more parties to a transaction understand their rights and responsibilities in relation to the transaction. What happens when a party fails to perform one or more of their responsibilities or fulfill a promise in a contract? When that occurs, the party who failed to perform or fulfill a promise has breached the contract. Some breaches of contract are relatively minor and may be resolved through conversations amongst the parties. Other breaches are more severe and impactful. Those breaches may require more in-depth negotiations and possibly litigation to be resolved. Regardless of how minor or severe a breach of contract is, it is important to ensure the breach gets resolved. The attorneys at West & West, Greer & Estorga handle contract disputes throughout Texas, the Texas Hill Country, San Antonio/Bexar County, Seguin/Guadalupe County, Kerrville/Kerr County, Bandera/Bandera County, New Braunfels/Comal County, and Boerne/Kendall County.

Regardless of how minor or severe a breach of contract is, it is important to ensure the breach gets resolved….

Types of Breach of Contract

There are multiple types of breach of contract but ultimately a breach of contract is either material or non-material. A material breach of contract is a more serious breach than a non-material breach. A material breach of contract is one that gets to the heart of a contract and undermines the purpose of the contract. A non-material breach of contract is a minor breach, usually of a peripheral term of a contract. A non-material breach is one that does not undermine the entire purpose of the contract.

Remedies for Breach of Contract

There are three general types of remedies for a breach of contract. Which type of remedy is available depends on the type of breach and the language of the contract. The three types of remedies are:

Damages
Specific Performance
Cancellation

Damages

Damages are a payment of one form or another to remedy a party hurt by a breach of contract. There are many types of damages, including:

Compensatory damages; which are intended to put the non-breaching party in the same position they would have been in if the breach had not occurred.
Punitive damages; are payments the breaching party must make beyond compensatory damages.
Nominal damages; are small amounts of damages awarded when the non- breaching party has not suffered substantial losses.
Liquidated damages; are a type of damage that the parties agree, in the contract, to pay in the event of a breach of the contract.

Specific Performance

Specific performance is a remedy a non-breaching party may seek, in which the breaching party is ordered to perform the duty they breached. Specific performance can provide a remedy when damages are inadequate or cannot be quantified.

Cancellation/Termination of Contract

In certain circumstances a non-breaching party may also be entitled to cancel or terminate a contract when a breach occurs. Whether or not cancellation of a contract is available often depends on the type of breach and language of the contract.

Breaches of contract can occur on all types of contracts from employment contracts to purchase agreements to real estate contracts. If you have breached a contract or think another party has breached a contract, contact us today.