Contracts are the foundation of a business, not only within the organization but also in all commercial and transactional interactions. In the business world, contracts define relationships, and business entities rely on well-crafted agreements to keep operations running and ensure the business’s viability.
A contract will usually end when all parties have fulfilled their obligations, unless one side fails to meet the terms of the agreement. In a subsequent contract dispute, the injured party may move forward with a breach of contract lawsuit. For business owners in Maumee and northwest Ohio, examining all options for resolution is a priority when moving forward to protect their legal rights and protect their interests.
Type of breach, type of defense
When one or more parties to an agreement do not fulfill their performance obligations as described in the provisions, they have committed a breach of contract. To determine the breaching party’s liability, the court will need to first establish:
- If the contract was valid.
- If the breaching party had a right to break the contract.
- If the contract was modified.
- The type of breach.
- The terms of the contract.
- If the injured party demonstrated a breach, and the extent of damages.
A contract breach may be anticipatory, partial, or material. An anticipatory breach is the most difficult to prove, and usually occurs when the plaintiff first suspects that the other party will not fulfill their obligations. In a partial breach, the plaintiff may sue for damages but cannot end the agreement. A material breach is serious enough to render the contract null and void.
When confronted with allegations of nonperformance, the defendant may justify the breach by suggesting:
- The contract to be invalid due to the plaintiff’s fraudulent actions, including false statements or a failure to disclose material facts.
- That the defendant signed the contract under duress or that the plaintiff had undue influence over them.
- That there was a mistake.
- That the statute of limitations has expired.
Breach of contract remedies
Not every breach of contract case goes to trial, and both sides may first try informal steps to resolve the conflict. If the amount is small, it may settle in small claims court. In a lawsuit, the remedies available range from a liquidated or punitive award, specific performance under contract by the breaching party, or the compete voiding and restitution of the contract by the injured party.