When you want to buy a home or transact with another business for products and services, you may enter into a legal agreement or contract. Doing this protects your interests and sets out a framework for the terms and conditions of the arrangement.
What happens when the other party does not come through as set out in the contract? A break or breach of contract is a common business and real estate contract issue that can cause significant stress for your business and result in financial hardship.
What makes up a breach?
A contract provides the details of the transaction between you and someone else. A breach occurs when one party to the contract fails to fulfill the terms it agreed to in one of the following ways:
While many of these breach types can rise to a stressful level, a major breach of contract may leave you with lingering financial consequences and put the entire transaction in jeopardy.
What do you need to prove it?
You have four years from a breach to bring a court action. You first must produce the agreement so that a court officer can confirm its legal validity. Once that happens, you need to prove that the other party failed to keep its promise which led to financial hardship for you. It is crucial that you keep all correspondence related to contracts and conduct as much as possible in writing in case you face a breach claim later.
Going to court for a contract breach is not ideal, but it may help you recoup any losses you sustained. If you have subsequent contracts that hinge on the one broken, a court action can help you reconfigure those to ensure you do not commit a breach.