A contract comprises a legally enforceable pact that imposes commitments on two or more parties. One party makes an offer, and the other party accepts the offer. Once they’ve agreed, the two parties should keep their word. The parties may have a written or oral contract with expressed or implied provisions.
Definition of a breach of contract
A violation of a contract can cause severe financial loss as a result. In some instances, the consequences of breaching the contract are well-outlined in the agreement. If the breach of contract favors society, the aggrieved party will not receive compensation.
A breach must meet the following requirements:
- Performance by one party
- A valid contract
- Evidence of loss or damages incurred by the performing party
Legal consequences may befall the party that breaches the agreement if they:
- Fail to keep the deadline
- Doesn’t meet the requirements indicated on the contract
- Fail to perform completely
The injured party will only have grounds for commercial litigation if the breach is material.
Damages and legal remedies
Contract law aims to compensate the performing party for any breach and restore their economic position. Punitive damages are rare in contract breach cases since contract violations are not seen as criminal acts. Nevertheless, there are instances where the reliance doctrine has certain exemptions. If a promiser fails to uphold their commitment, you can take legal action against them.
If contractual dependence causes other expenses, the aggrieved party may receive extra compensation. Additionally, if other people get hurt, the offender will compensate them. Different types of breach damages include liquidated, compensatory, and nominal damages. The compensation for damage depends on the contract signed and the court’s ruling.
Contracts should be upheld for the peace of mind of both parties. Nevertheless, a resolution becomes necessary when a party fails to meet its responsibilities. The terms of punishment for violating the contract are usually specified within the contract.