Types of Contract Breaches to Be Aware of

Because a contract has significant legal power in a court of law, it can be a little unnerving to put your pen to paper and sign one. A contract, like any agreement, relies on both parties to uphold their end of the deal.

Oftentimes, all parties involved fulfill their obligations, and the power of the contract goes untested. However, when one party doesn’t follow through, they commit what is known as a contract breach. There are a variety of types of contract breaches, each of which may necessitate a unique response.

This is why it’s important to not only be able to identify a contract breach when one occurs, but you should also understand what category the contract breach falls into.

The category that a contract breach falls into has implications for the legal recourse available to you, the kind of damages you can potentially seek compensation for, the amount of compensation you could potentially receive, and more.

Jump to a Topic

Minor Breaches

Also referred to as partial breaches, minor breaches represent a less serious kind of breach. If a party fails to perform part of the contract while eventually delivering the main item or service discussed, they have committed a minor breach.

For example, if you take your car to a mechanic and request a specific kind of oil, only to have them use a similar oil of an equivalent price — without consulting you — they have committed a minor breach.

Another example of a minor breach happens when a landscaper signs a contract saying that he will have completed your yard by a specified date but doesn’t finish until two weeks later.

Material Breaches

As you may have expected, a material breach is a bigger deal than a minor breach. For a material breach to occur, one party must receive a product that is significantly different from what they were promised in their contract.

One example of a material breach could be: one party hires another party to create an advertisement for a kitchen supplies company, only for the other party to create an advertisement for a restaurant.

In cases of material breach, the party who is not in breach of contract generally no longer has an obligation to fulfill their end of the bargain.

Additionally, the party who has been wronged may potentially have the opportunity to sue for compensation. The compensation received depends on the egregiousness of the breach, as well as the content of the original contract.

Actual Breaches

Actual breaches are straightforward and easily identifiable. An actual breach occurs when one party simply refuses or completely fails to fulfill its obligation by a specified date.

An actual breach may also occur when one party begins fulfilling its obligation but does not complete it. An example of this would be paying someone to paint a fence, only to have them paint half of it.

Anticipatory Breaches

An anticipatory breach deals with breaches that have not yet occurred.

Suppose one party in a contract can provide evidence that another party will be unable to fulfill their part of the contract in the future. In that case, the original party retains the right to terminate the contract early.

Anticipatory breaches often arise when one party announces that they will be unable to fulfill their end of the contract.

Effective Assistance with Contract Breaches

If a contract breach has victimized you or someone you know in New York City, contact the attorneys at Woods Lonergan today. Their team of specialized business lawyers will work tirelessly to help protect your contracts, as well as your assets.

About the Author

James F. Woods is Founder and Managing Partner of Woods Lonergan. He has tried more than 60 jury cases to verdict as first-chair trial counsel, beginning his career as a prosecutor, and resolves complex commercial and real estate disputes valued at $1M to $100M+ for business owners, principals, and middle-market enterprises across the New York metro area. He appears regularly in the New York Commercial Division and in the federal district courts for the Southern and Eastern Districts of New York, and has argued appeals in the Appellate Division and the Second Circuit.

His practice covers complex commercial litigation, real estate and asset litigation, partnership and shareholder disputes, fiduciary breach and corporate fraud, and cooperative and condominium governance. He counsels corporate and cooperative boards throughout New York.

The Legal 500 United States ranks James in its New York Elite rankings for Commercial Disputes, and his peers have recognized him with Martindale-Hubbell's AV Preeminent rating. Woods Lonergan is ranked in Chambers USA: Spotlight New York for Litigation: General Commercial and Real Estate. James serves on the Commercial & Business Litigation Committee and the Business Torts & Unfair Competition Committee of the American Bar Association Section of Litigation, and on the Cooperative & Condominium Law Committee of the New York City Bar Association. His commentary on New York commercial and real estate disputes has been quoted in The New York Times, The Washington Post, Bloomberg Law, Law360, and Forbes.