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What constitutes a breach of contract?

What constitutes a breach of contract?

Contracts are fundamental to business operations. They outline the relationships that entities have with their employees, contractors, and vendors. When a Detroit business enters a new contract, it makes promises that must be fulfilled or face significant sanctions.

The failure of a party to a contract to meet their obligations is considered a breach. This post will discuss contractual breaches and what they may look like. No legal advice is provided in this post, and when readers have questions about contract law, they can turn to their trusted Detroit-based business law attorneys for case-specific advice.

Understanding contracts to understand breaches

A contract needs a few elements to be valid. It must encapsulate an offer by a party, an acceptance by the other, and an exchange of consideration between the two. A simple contractual relationship may involve a company offering a prospective employee a job, the acceptance of the job by the individual, and the company agreeing to pay the individual for the work they perform.

Contracts can include other elements, such as rejections and counteroffers. A knowledgeable contracts attorney can help a reader work through these matters if they are impacting their contractual relationships.

Identifying breached contracts

There are many places that breaches may occur in contracts. One of the most obvious ways is when a party does not perform as they promised under their agreement. In the above-mentioned example, if the employee signed their employment contract but then did not perform any work for the employer, they would be in violation of their agreement to work. Similarly, if the employee worked but the employer failed to pay them, the employer may be in breach of contract.

Breaches can come up in timing, performance, cost, and other contractual provisions. One way to avoid breaches is to have contractual terms tailored specifically to the parties’ needs. When this is done, there may be fewer opportunities for contractual parties to have to use contractual remedies to enforce the performance of their agreements.