What to Know About Breaches of Contract Contracts are intended to protect both involved parties and ensure that an agreement is met according to certain conditions. In some cases, though, one or both parties may not follow through, and the result is a breach of contract. Here is what you should know about breaches of contracts to help you decide when it is time to seek the guidance of an attorney. Definition of a Contract Although written contracts are the most common mechanisms used in business and personal matters, there are many types of contracts. In some cases, a verbal agreement may be considered a contract by the court, but this is also the most difficult to defend. More subtle types of contracts are employment agreements and online sales. If you are unsure if your situation is founded upon a contract, check with an attorney. Not All Failures are Breaches A failure to follow through on a contract, even one that is in writing, may not necessarily be a breach of the contract. Both parties in any contract have the right to terminate or not fulfill the contract under certain legal, legitimate circumstances. For example, an employer who fires you for cause is not breaching the contract of employment. A contractor may terminate an agreement if you fail to pay for materials and labor. The best way to know if there has been a breach of contract is to speak with an attorney rather than interpret the law on your own. Two Types of Breaches According to the law, there are two types of situations that fall within breaches of contracts. The most obvious is when someone fails to complete the terms of the contract by a pre-set deadline. The second is when someone lets you know ahead of time that they do not intend on fulfilling the terms of the contract. Both types of breaches are allowed within the court system, but the caveats of these cases are best handled by an attorney.
Real Damages If you decide to file a case for breach of contract with the court system, you must be able to prove some type of damages. Be sure to document everything and keep good records, including any written contracts and paperwork that are relevant for your case. Even if you do not believe that your documentation applies, it is always best to err on the side of caution.