The purpose of a contract is to outline each party's duties and hold each party responsible for fulfilling them. However, this doesn't always happen for various reasons. When this occurs, it's called a breach of contract. There are different types of breaches, and each determines the legal action you can take and compensation you can receive, so it's important to know which kind of breach you have experienced.
A minor, or partial, breach is when one party fails to complete only a portion of the contract. The remedy is compensation for only the unfulfilled duties. The other party still has to maintain its responsibilities under the contract. Sometimes a seemingly small detail can result in more than a minor breach if it has a significant negative impact on the rest of the contract or the business performance of the other party. For example, a late delivery when a contract explicitly stated the importance of meeting a due date would be a material breach.
A material breach is when one party doesn't fulfill or incorrectly performs a substantial part of its obligations, leading to larger consequences. As a result, the affected party does not have to uphold its end of the contract and can decide whether to maintain the contract or terminate it if it's ongoing. The court will determine if a breach is material based on the following factors:
- Was the mistake intentional, innocent or based on negligence?
- How much of the contract did the breaching party complete?
- Will the breaching party finish carrying out its obligations?
- How much benefit did the affected party already receive?
- Is compensation possible?
- What effect would excusing the responsibilities of the affected party have on the breaching party?
Because of the many factors involved and the uniqueness of each situation, the judgment of a material breach relies on a case-by-case basis.
Other types of breaches
While minor and material breaches are common, they are not the only types. A total breach is when a party fails to complete any of the contract at all. An anticipatory, as opposed to actual, breach is when one party expresses in advance the intention not to uphold the contract, or the other party realizes this will happen. If you're still unsure which applies to your situation, consult a Florida breach of contract litigation attorney for more information. The sooner you act, the better as Florida has up to a five-year statute of limitations on contract disputes.