How breach of contract may occur

| Jun 14, 2021 | Firm News

If you run a business in Michigan, there may be a point when you are involved in a breach of contract. While a breach of contract could occur because of one party doing something wrong, it can also occur when both parties have the best of intentions. For example, one party may fail to deliver something promised to the other party after problems arise that interfere in the completion of the project.

Types of breaches

While getting things in writing is always a good practice, a breach of contract can also occur when the contract is oral. However, it is necessary to prove that the breach occurred for legal action to be successful, and having an oral contract might make this more difficult. Not all oral contracts are considered binding in business law. Breaches may be minor or material, the former being more serious. A breach may also be either actual or anticipatory. The latter happens if one party informs the other ahead of time that the terms of the contract will not be met.

Why some breaches happen

The first step in taking legal action is to inform the other party that the breach has happened. There may be times when a party decides to breach a contract because it is less costly than fulfilling it. Two parties might also breach a contract if they both agree that it is in their interests.

Not every breach of contract has to wind up in court. However, a breach can be costly even when it is unintentional. A business owner who has suffered from a breach of contract may want to contact an attorney to discuss the situation. It might be possible to reach a solution without going to court.

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