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What is a Breach of Agreement?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 11 November 2016
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A breach of agreement is a failure to follow through with the terms set out in a legal agreement. This civil wrong is also known as a breach of contract. When people breach agreements, there can be consequences. These consequences vary on the basis of the nature of the breach and other factors, and it may be necessary to take the matter to court to receive satisfaction if the parties cannot work out an amicable resolution.

In a legal agreement, rights and responsibilities for all parties are set out in clear language, and signing the agreement indicates a commitment to follow through with the agreement. For example, a home owner and a roofing contractor could enter an agreement for a contractor to reroof the home with materials specified in the contract, and the homeowner agreeing to pay for the service. The contractor has a responsibility to reroof the home as directed, while the homeowner has a responsibility to pay for the roofer's materials and time.

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In a breach of agreement, one or more of the parties involved fails to honor the agreement. To continue the roofing example, the contractor could use green roofing tiles instead of blue ones as specified in the contract, and this would be a breach. The contractor could also fail to roof the home at all, or not complete the job. Likewise, the homeowner could decline to pay. For all of these breaches, the party wronged could recover damages, such as the costs for having another contractor complete an unfinished job.

A minor or immaterial breach of agreement involves a situation where the precise terms of the agreement are not followed, but the contract is still carried out more or less as directed. Substitutions are an example of an immaterial breach. If the substituted material is functionally identical to the material specified, it may be deemed acceptable. Material breaches occur when the contract is not fulfilled as specified, and the wronged party is entitled to damages to correct the situation.

Anticipatory breaches occur when it becomes evident that one party will not be meeting an agreement, allowing the other to terminate without penalty. In order to make such a breach, it must be very clear that the other party to the contract would not fulfill terms and obligations; a roofer who sells off all of a company's roofing equipment before finishing a job, for example, is making it impossible to finish the job and the homeowner could break the contract. Finally, fundamental breaches are breaches that entitle the other party or parties in the contract to terminate it immediately because the breach is so serious.

If a breach of agreement is likely to occur or is occurring, it is advisable to consult a lawyer to discuss next steps and the appropriate action to take. A specialist in contract law can review the terms of the agreement, determine the severity of a breach of agreement, and prepare to address the matter in a private settlement or in court.

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Markerrag
Post 1

A good rule of thumb -- the longer a contract is, the easier it is to breach. One of the problems with modern contracts is that drafters try to cover every possible contingency and it is far too easy for one party or another to get lost in the details and get in over his or her head in a hurry.

Contracts should set forth the rights and obligations of each party and should address what constitutes breach and the penalties for that. Everything else is just wasted ink.

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