Learn About the Consequences of Breach of Contract

Breach of Contract Learn About the Consequences of Breach of Contract

What Are the Consequences of Breach of Contract?

What happens when a client breaches your agreement? What are the main consequences of a breach of contract? This article will provide detailed information about this type of contract law violation and explain what you can do to collect damages.

One of the possible courses of action is sending a demand letter to the breaching party, and DoNotPay can draft it for you in mere minutes.

What Is a Breach of Contract?

If one of the parties fails to perform their contractual obligations, they are in breach of contract. There are four main types of breach—find a brief overview of the types in the table below:

Type of Breach of ContractExplanation
MaterialThis is the most severe breach as it involves the breaching party’s failure to fulfill the whole of the contract. When a material breach occurs, it makes the agreement irreparably broken
MinorA minor breach happens when a part of the agreement is not fulfilled, but the rest of it is
AnticipatoryAn anticipatory breach occurs when a party to a contract says or shows with their actions that they will not perform the obligations spelled out in the agreement
FundamentalA fundamental breach of contract is deemed so severe that it entitles the aggrieved party to terminate all obligations that bind them by the contract

Breach of Contract Consequences

While the injured party experiences loss and injury because of a breach of contract, the breaching party has to suffer legal consequences.

The repercussions usually depend on the severity of the breach. Some of the most common consequences the breaching party will suffer are being sued for:

  1. Legal remedies
  2. Monetary damages
  3. Specific performance
  4. Rescission
  5. Reformation

What Constitutes Monetary Damages?

Monetary damages are damages that the court awards to the injured party to make up for the losses they suffered due to the contractual breach. Monetary damages can be:

What Is Specific Performance?

If the breach is so severe that monetary damages are not a sufficient remedy, the court enforces specific performance. It is a remedy that orders the breaching party to perform the duties outlined in the contract. The court will award specific performance when the contract in question involves real estate or valuable items that cannot be replaced.

What Is Rescission?

Rescission makes the contract void and terminates it. The court usually uses rescission when one of the following happens:

  • Fraud
  • Duress
  • Undue influence

What Constitutes Reformation?

The reformation of a contract happens when the court rewrites the agreement to correct any inequalities featured in it. When awarding this legal remedy, the court makes sure that both parties’ intentions are reflected in the agreement.

Can You Resolve the Matter Out of Court?

You may try to resolve the dispute with a demand letter before filing a lawsuit. A demand letter will inform the defendant about what they need to do to rectify the situation.

There are several ways to create the letter:

Write Your Demand Letter With DoNotPay in a Few Steps

You don’t have to spend money on lawyers and collection agencies to ask for compensation—DoNotPay can provide you with a professionally written breach of contract demand letter that complies with your state laws. Unlike unreliable online templates and samples, we will take all the relevant information you provide so we can fully personalize your letter and create it in a way that will completely cater to your needs.

What you need to do is sign up for DoNotPay and follow the simple instructions below:

  1. Open the Client Breach of Contract product
  2. Provide information about your situation
  3. Specify the payment deadline
  4. Describe the performed service and add photo proof if you have any

Once we generate your personalized demand letter, you can download it in PDF, print it, and send it to the breaching party.

Proceed to Court With DoNotPay if Your Letter Goes Unanswered

If the breaching party does not respond to your letter and ignores your demands, you can file a lawsuit with DoNotPay’s help. Make sure that you can prove the following breach of contract elements if you want to win the case:

  1. The existence and validity of the contract
  2. Defendant’s failure to uphold their end of the agreement
  3. Your performance according to the contract terms
  4. Losses you suffered as a result of the breach

Keep in mind that if you cannot prove some of these elements, the defendant can use the lack of evidence as their defense.

DoNotPay will help you file your claim in small claims court by:

  • Collecting all the necessary documents
  • Filling out the court forms
  • Filing the lawsuit
  • Creating a script you can use at your court hearing

DoNotPay Offers More Help for Your Business

Running a small business is no small feat. When you’re drowning in red tape, DoNotPay is here to lend a helping hand. Whether you need to register your trademark or protect it later on, we have got it covered. With our help, you will keep your logo, slogan, and business name safe.

Are you also yet to register for an Employer Identification Number (EIN)? Not to worry—our app can file the IRS SS-4 form in a few clicks. With the world’s first robot lawyer at your fingertips, you will also be able to create your 83(b) election forms with ease—ready for your employees to sign them right away.

In case you are struggling financially, we can assist you with a business loan application.

Communication Has Never Been Easier With Our App

Keeping up with clients can be challenging, especially if each has a preferred method of communication. Luckily, our multifunctional app makes it easy to both fax and mail contracts, letters, and documents.

You can also count on our assistance when you need to:

  • Fight fake negative reviews online
  • Deal with a client regarding a breach of contract
  • Dispute fraudulent chargebacks

Thanks to DoNotPay, there is no need for back-and-forth communication. We will handle the necessary demand letters and forward them on your behalf.

We can also help you manage your DMCA agent registration and Privacy Shield program self-certification.

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