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What to know about breaches of contract and contract disputes

When two parties in Florida enter into a contract, each is legally obligated to perform their contractual duties. If a contracting party violates the contract by failing to perform as promised, the non-breaching party can pursue remedies as called for in the contract for immaterial breaches or through the court or alternative dispute resolution processes to resolve material breaches.

Understanding a breach of contract

A breach of contract occurs when one party fails to perform as promised in a contract. Before a breach can occur, there must be a valid contract with one party performing its duties. The performing party must also suffer damages because of the other party’s non-performance. A breach can include a party’s failure to perform their duties on time, complete non-performance of the contractual duties, or failure to perform their duties as promised in the contract.

Types of contract breaches

Contract breaches can be immaterial or material. Immaterial breaches do not cause major harm and can be corrected so the parties can continue with the contract. These contract disputes can often be corrected through negotiation and contract modification without going through the litigation process. By contrast, material breaches are severe enough to make it impossible for the other party to continue under the contract. These must typically be resolved through litigation or alternative dispute resolution procedures such as arbitration.

When a contract breach occurs, the non-breaching party can seek several remedies. The available remedies in a breach of contract action might include liquidated damages, recession of the contract, restitution to make the injured party whole, or an order for specific performance under the contract. The available damages will depend on the breach’s nature and the contract type. For example, specific performance can’t be ordered in service contracts because of prohibitions against involuntary servitude.