Breach of Contract and Your Business

A business contract is a legally binding agreement that stipulates the obligations of the parties involved in the agreement. A party who fails to fulfill their obligations is considered in breach of the contract under the law. A breach can occur under a variety of conditions depending on the specifics of the contract. These conditions include:

• Failure to perform on time
• Not performing in accordance with the terms of the agreement
• Failure to perform at all

Categorizing the Breach

A breach of contract can fall into one of two categories, material or immaterial. This is to determine the appropriate legal remedy for the breach. An immaterial breach would be one in which one of the party performed it obligations, but not by the standards in the terms of agreement.

Immaterial v. Material Breach

For example, Business A is to deliver goods to Business B on Monday and does not do so until Tuesday. In this case, Business B would not be entitled to money damages.

In the same example, the breach would be material is the contract stated explicitly that "time is of the essence." In this case Business A would be held liable, and Business B’s damages would be presumed.

Speak with an Austin Business Lawyer

As a small business owner it is critical to be aware of your rights and duties under the contracts into which you enter. If you feel that a second party has breached contract, seek out the support of a law firm that knows business. Contact the Austin business lawyers of Slater, Kennon & Pugh Ltd.LLP at 512.472.2431 today.