Many people are familiar with the term contract. Whether they realize it or not, at some point throughout their day, a person will be engaged in a contract or at least benefit from someone else making a contract. But, what does it mean to be in breach of a contract? Does a breach automatically mean the contract is no longer valid? In the article, we will discuss what a material breach of a contract means.
What Is A Contract?
Before a person can understand what a breach of a contract is, they need to know what a contract is. The basic definition is that a contract forms when two or more people or entities agree to exchange goods or services for something of value. There are many different types of contracts which is not the focus of this article. In this article, we want to look into what happens under Florida law when one or both parties to a valid contract breach or break it.
What Is A Material Breach of Contract?
A material breach is when one party of a contract violates the terms of the contract to a point where the other party no longer has any obligation to fulfill their part of the contract. A breach by one of the parties to a contract essentially discharges the obligations of the other parties. For example, if a homeowner hires a painter to paint their house and agrees to a twenty-five percent deposit for the painter to start work, the homeowner refuses to pay until the painter starts. The homeowner is in a material breach of the contract. The painter is not obligated to paint the house.
Can A Person Claim The Other Party Breached A Contract?
Under Florida law, there are certain elements a person has to show to prove the opposing party breached a contract. They must show the following:
- There was a valid contract
- That the other party or entity did not perform as to the agreed terms of the contract
- Damages occurred as a result of the breach
Can Any Violation Of A Contract Be A Breach?
Not necessarily. Contracts can be rather complex documents with very technical terms. Therefore, a violation of a small term may not be sufficient to render the whole contract null and void. For example, party A and party B both sign a contract. The contract states that party A must pay party B on the first of the month. However, both parties forgot that the first of the month was a holiday. As a result, party A must render payment on the 2nd of the month. This would not be considered a material breach, thus rendering the contract null and void.
What Happens If A Breach Occurs?
If a breach occurs, the non-breaching party will be discharged from performing the rest of the contract. If the non-breaching party has been damaged as a result of the breach, they might have the ability to seek compensation from the breaching party. An example of this is where a restaurant with limited capacity accepts reservations and holds a reservation for a group of people to arrive at 8 PM and takes down a credit card to ensure they will show up. Since the restaurant will have to turn away other patrons, thus potentially losing out on thousands of dollars, they no longer have to hold the table if by 8:30 PM the group does not show up and might be able to charge the credit card for the lost revenue during that time period.
Contact Dowd Law
If a material breach of contract impacts you or your business and you want to know your rights, contact Dowd law for a consultation.