What is Breach of Contract

What is breach of contract? Breach of contract is the cause of action that arises when one party fails to perform under a contract. That’s too legalese. If one party doesn’t do what they’re supposed to in a contract, they’ve breached that contract. However, it is not always that simple.

What is a contract?

Contracts are legal agreements between two or more parties. They have essential elements and provisions that are unenforceable. Generally, courts enforce contracts exactly as written. However, they can also be oral or implied. Unfortunately, we’re not going to discuss implied contracts here because they are vastly more complicated. Oral contracts only face one complication. That is proving the terms. Therefore, we’ve written about memorializing the oral contract.

Material Versus Immaterial

There are two types of breaches. You materially breach a contract when you fail to perform a critical part of a contract. Certain terms are regularly material. These include price, parties, and more. You can also specify in your contract what is material.

Most terms are immaterial. Immaterial terms can be material, but only if you specify that they are. Courts tend to err on the side of immaterial if they can.

Why does it matter? If you materially breach a contract, the other party might get to void the contract altogether. Alternatively, immaterial breaches generally only come with monetary damages. These can be small.

Damages in Breach of Contract

Typically, under North Carolina law, the damages for breach of contract are only compensatory. This means you only get the monetary loss resulting from the breach. For example, if you order a red bicycle and receive a blue one, your damages may be nominal. Nominal damages simply means you win, but you win next to nothing. On the other hand, you could win the cost of repainting the bike. It is up the the court to decide. If the color of your bike is critical, you should label that term as material. This way, you can void the contract and get all your money back.

Breach of contract, by default, does not come with attorney fees. However, you can specify in the contract that both parties are entitled to attorney fees if they win a lawsuit against the other party. This is one of two ways a breach of contract claim can come with attorney fees. The other way is reasonable attorney fees in collection efforts.

If you have questions about a potential breach of contract or would like information on pursuing a case, feel free to contact us at info@lawplusplus.com or by calling (919)912-9640.

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