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What are four types contract breaches?

As a Newport Beach area business owner, you know that contracts are essential when procuring and rendering services and purchasing goods from vendors. Contracts set the terms and expectations for all involved parties. They also allow you to have realistic expectations about your business dealings. When one of the parties you hire do not honor their responsibilities and obligations, you might find yourself dealing with a breach of contract.

Contract breaches are very common in the business world. There are a variety of reasons for their occurrence. Regardless of what those reasons are, it is beneficial for you to know what kind of breach you are dealing with to pursue the right resolution tactics. 

There are four types of contract breaches—actual, anticipatory, material and minor.

  • Actual breaches are when a contracted entity or person fails to complete their responsibilities by a certain date and when they only complete some of them.
  • Anticipatory breaches are when one party intentionally or unintentionally makes it known they will not fulfill their contractual obligations by the delivery date. 
  • Material breaches occur when one party delivers something significantly different than outlined in the contract.
  • Minor (immaterial) breaches happen when one person or party honor their responsibilities. But the services or products they deliver are either late, not entirely as stated in the contract or incomplete. 

According to FindLaw, “most business contract breaches are immaterial or material.” To prevent potential breaches, you should review the terms of all contracts, especially the portions outlining the time of delivery and duties of the breaching party.  

You have the right to take legal action. Litigation is best as a last resort tactic after not getting favorable results with other resolution methods.