A contract is a type of legal agreement between two or more parties. When you fail to adhere to the guidelines mentioned in the contract, it can result in a breach of contract.  

A valid contract must include certain elements to make it enforceable. If the contract doesn’t consist of these basic elements, then the contract is null and void.  

However, the breach is something determined based on the gravity of the inability to meet the legal obligations of the contract. Sometimes it’s a minor breach or sometimes it results in a material breach.  

However, you might be wondering what is the major difference between the two. Well, don’t worry, we’ve got your back! This blog will help you to understand the different categories of breach of contract. Read on to learn about the remedies and the differences in detail.  

Understanding Breach of Contract

To put it into simple words, a breach of contract is something when the terms of an agreement are broken between two or more parties. This also includes the fact that the obligations as stated in the contract are not properly completed timely.  

Imagine if you are late to pay rent on time. Hence the obligations of the contract are not fulfilled. In that case, if the contract mentions that failure to pay rent can even mean vacating the apartment, you have to do that too.   

Sometimes your lawyer even adds an outline in the contract about contract breach. This acts as a precaution and clearly safeguards the rights of both parties. For example, your contract mentioned in the event of failure to pay rent, you have to pay a $20 late fee with it.  

However, if the consequences are not mentioned in the contract of any specific violations, the parties can sit together and come to a middle ground. This can even lead to drafting a new contract as well or even coming up with a different type of resolution.  

What Are The Characteristics of Breach of Contract?

A breach of contract practically means when either of the parties does not perform the terms as outlined in the contract. The contract laws are set according to the laws of the state. The legal elements thus need to prove the contract breach is lawful and the contract is a legally enforceable contract. However, there are other factors that qualify as a breach of contract. Let’s see what they are:  

• The party who didn’t breach the contract performed their part of the contract.  
• The party who breached did not follow the rules in accordance with the requirements present in the contract and hence the breach wasn’t excused.  
• The contract breach took place within the statute of limitations that was filed in the breach of contract cases.  
• The lawsuit was filed before the expiry of any terms under the statute of limitations.  
• The non-breaching party has harnessed certain damages.  
• The breach was a direct and proximate cause of the non-breaching party’s damages.  

Hence proving these elements of breach of contract is essential to understand the breach. It also plays a critical role in recovering all the damages caused by the breach of contracts.  

Different Types of Breach of Contracts

There are actually 4 types of breach of contracts. However, there are primary and secondary differences between them. Let’s see what they are:   

Minor Breach

This primarily happens when you don’t receive something by the due date.  

For example, you bring your tailor a suit to make it fit in a custom manner. Hence, in that case, the tailor promises you with an oral contract when they will deliver the suit in time for your event. However, the tailor then misses the deadline and then delivers it a day later. In that case, it is now a minor breach of contract.  

Material Breach

Suppose you receive something that is very different from the goods or services that are stated in the agreement.  

For example, your firm enters into a contract with a vendor where the vendor would deliver your firm with 200 copies of a bound manual. However, when the package arrives, it only contains gardening brochures.  

Actual Breach

This happens when one of the parties refuses to perform the terms of the contract, intentionally or unintentionally.  

Anticipatory Breach

This is a type of breach where one of the parties beforehand states that they are unable to deliver the terms of the contract.  

Material vs. Minor Breach of Contract: Key Differences

As discussed in the previous section, the breach of contract is primarily categorized into two types: minor and material. However, even though they both deal with contract breaches in a minute and a major way.  

In a minor breach of contract, the party performs most of the terms of the contract. However, they fail to perform one minute part of it. This doesn’t significantly impact the contract and other terms mentioned in it.  

On the contrary, the material breach of contract deals with a major breach of agreements. It usually doesn’t prevent completing the contract in a way that might even result in something satisfactory. A material breach of contract makes it almost difficult or impossible to achieve a satisfactory result through a contract.  

The concept of a minor and material breach of contract primarily depends upon various jurisdictions. Some jurisdictions discharge these breaches differently in different states. To put it into simple terms, in some jurisdictions, the non-breaching party has no more requirements under the contract and can even sue the other party for damages 

Some states on the other hand, some states completely depend on a jury or a judge. This determines whether it is a breach of contract or not or what one should do for appropriate remedies.  

If the non-breaching party has received the same outcome, even though there was a minor breach of contract, the court has the prerogative to tell that you will be awarded damages as a non-breaching party.  

However, you must remember that as a non-breaching party, you must adhere to different contractual obligations to get the proper damages.  

Factors Leading To Breach of Contract

You might be wondering what causes a breach of contract. Of course, there should be a legal reason for it.  

Consider this: If the defendant claims that the contract is fraudulent where the plaintiff misinterpreted and concealed many material facts.  

The defendant can also argue that the contract was signed under the conditions of duress. This made the plaintiff coerce them and apply threats to them.  

In other cases, while drafting the contract, the attorney made some mistakes while drafting the contract, which led to the breach of contract. Sometimes it can also be something where both the plaintiff and the defendant have massively contributed to the breach.  

How To Avoid Any Breach Of Contract

After knowing the possible reasons for the cause of breach of contract, you’re now probably wondering how to avoid these breaches altogether. Here are the 3 major things you should keep in check before you sign any contract in the future:  

Clarity

The language and the sections of the contract should be extremely clear and precise. Suppose one of you as parties isn’t well-versed in the native language of the contract, it is best if you hire an interpreter to interpret the contract. It will thus ensure that everyone understands their roles and expectations that are mentioned in the contract.  

Expectations

Before you sign the contract, it’s important that you and the other party understand the expectations of the contract and what they outline. Keep in mind that the expectations mentioned in the contract are realistic in nature. Moreover, it shouldn’t only depend upon any future amendments which may or may not happen.  

Legality

To make your contract binding and ironclad, it needs to have a proper amount of legality. If you’re not sure about its legal stature, contact a lawyer about it before you commit to a signing process.  

Societal and Economic Effects of Breach of Contract

Breach of contract can work in the interest of the society as a whole. Even if it’s not sometimes favorable to all the parties in the contract, it might affect society and even the overall economy. If the total cost of breaching a contract to all the parties is less than the net cost to all the parties that are upholding the contract, then it automatically results as one.  

Can a Breach Of Contract Be Beneficial: Let’s Find Out!

You will be surprised to know that sometimes a breach of contract, mutually helps both parties. How? Let’s explain it to you with the help of an example.  

A farmer agrees to sell grapes he grew in the spring to a winery during the fall. However, over the summer, the price of grape jelly rose considerably and the price of wine fell as well. Hence, the winery unfortunately won’t be able to afford the grapes at an agreed-upon price.  

Thus the grape farmer can sell the grapes to another party and receive a higher price than the jelly factory. In this case, the interest of both the farmer and the winery would be in favor of breaching the contract.  

Thus, economists have determined that upholding this particular contract would be economically inefficient for society. In that case, thus breaching this contract would work out in everyone’s interest.  

Final Thoughts

And that’s a wrap! Now you know everything you had to know about material and minor breach of contract. You have learned about its implications and you now also know what can do when the breach takes place. Remember it’s not something negative all the time.  

We hope this article was informative and helpful.  

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