As a business owner, you have a firm grasp on the importance of business documents, contracts, and relationships built. As a small business owner, you also know how beneficial or detrimental these elements of business can be. With breach of contract being among the most common business litigation matters, it is important to understand how a breach of contract impacts small business owners.
What is a Breach of Contract?
When you sign a contract, you expect the terms to be fulfilled as stated in the document. Unfortunately, that doesn’t always happen. Failure of one party to uphold the terms of a contract is considered a breach. Some common examples include:
- A coworker or business partner failing to complete an obligation outlined in the contract.
- An employee engaging in contractually prohibited behavior.
- A customer preventing a contractor from completing contractual obligations.
A breach of contract may occur when any party fails to uphold his or her contractual obligations related to the duties specified, time frame, completion of obligations, or initiating compensation as identified in the contract.
How a Breach of Contract Impacts Small Businesses
The most striking way that a breach of contract impacts small businesses is the fact that breaches waste time, money, and effort you put into your business. Not only does the breach itself cost you time and money, but it is likely that the resolution process will also. Resolving contract disputes requires that your situation meets specific criteria for a breach of contract, which may include:
- Material Breach: A failure of one party to uphold contractual obligations leaving the other party harmed (financial loss, etc.)
- Fundamental Breach: When two parties sign a contract that cannot be fulfilled, such as signing a lease but then discovering the property was already rented to someone else.
- Anticipatory Breach: A failure of one party to complete obligations within a specified time frame, such as agreeing to perform home renovations by October 1, but not having started on said renovations on September 30. Because it is reasonable to assume that the renovations cannot be completed by the deadline, the other party may claim an anticipatory breach of contract.
- Minor Breach: When one party to the contract partially completes obligations, or obligations are completed with errors needing correction.
Once you establish that a breach of contract has occurred, you must then start the process of building a credible case. You must establish that there was a contract, that it was broken, that you suffered harm or financial losses, and that the person identified was responsible.
Getting Help Building a Credible Case
At Daic Law, we know that a breach of contract can have a significant impact on small businesses. We are here to help small business owners understand and protect their legal rights and business interests. Contact us today to learn more about how we can help you build your case and get you the resolution you need and deserve. Fill out our online form to get started.