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.
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 Contract||Explanation|
|Material||This 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|
|Minor||A minor breach happens when a part of the agreement is not fulfilled, but the rest of it is|
|Anticipatory||An 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|
|Fundamental||A fundamental breach of contract is deemed so severe that it entitles the aggrieved party to terminate all obligations that bind them by the contract|
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:
- Legal remedies
- Monetary damages
- Specific performance
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:
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.
Rescission makes the contract void and terminates it. The court usually uses rescission when one of the following happens:
- Undue influence
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.
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:
- Having a lawyer draft it
- Using demand letter templates
- Hiring a collection agency
- Registering for DoNotPay
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:
- Open the Client Breach of Contract product
- Provide information about your situation
- Specify the payment deadline
- 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.
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:
- The existence and validity of the contract
- Defendant’s failure to uphold their end of the agreement
- Your performance according to the contract terms
- 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
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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.
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