What happens when a party breaches a business contract?

Contracts are often the backbone of professional relationships, whether they are between employer and employee or partners developing new buildings. When parties are clear in the expectations of the relationship and follow through with their agreements, everyone can benefit.

However, this doesn't always happen. There are situations when a party breaches -- or is accused of breaching -- a contract. Should this happen, a legal dispute can arise putting the end product and the relationship in jeopardy. If you are in a situation involving an alleged breach of contract, you should understand a few basic elements about these claims.

Having a contract in place

In order for a contract to be breached, there must be in place a valid, enforceable contract. Parties could defend against a breach of contract claim by arguing that there was no contract to breach, therefore, there are no legal penalties for their action (or inaction). 

Showing evidence of a breach

Breaching a contract means that a party fails to perform one or more elements of the contract. However, it is important to understand that not all breaches are the same.

Minor breaches are breaches that don't affect the performance of the contract. Material breaches, on the other hand, are breaches that significantly affect the outcome, performance or services established in the contract. A party accused of material breach of contract can face numerous penalties.

Finding a solution

In cases involving a material breach of contract, parties need to take legal action to address and resolve the issue through mediation, arbitration and/or litigation. Depending on the details of the case, the resolution could include:

  • Cancellation of the contract
  • Enforcement of the contract, requiring the breaching party to fulfill the terms of the contract
  • Payment of financial damages to non-breaching party

Contract breaches can lead to costly delays, disputes and performance issues so it is important that parties deal with them promptly and with legal support.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Email us about your case

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Doughty Alcaraz, P.A.

Office Location:

Doughty Alcaraz, P.A.
20 First Plaza NW, Suite 412
Albuquerque, NM 87102

Phone: 505-273-9535
Fax: 505-242-8707
Map & Directions

Phone Numbers:

Review Us