Warren Gammill & Associates, P.L.

Breach of contract vs. breach of fiduciary duty: How they differ

2025-12-23T09:20:54Z

When individuals or entities fail to fulfill their duties or abuse their authority, businesses can take legal action against them. There are different types of breaches, and determining which type applies to a particular situation can be tricky without the appropriate guidance. Two types of breaches that are often confused with one another are breach of contract and breach of fiduciary duty. A breach of contract may not involve a breach of fiduciary duty. However, a breach of fiduciary duty generally includes at least one breach of contract. Let’s take a brief look at both.

Breach of contract

A breach of contract occurs when any party to a legally binding agreement fails to fulfill at least one of its terms. This often involves failing to finish a project on time, deliver a product or make the agreed-upon payment by the due date. A well-written contract allows for exceptions when necessary. This is often done with a force majeure clause that provides relief from litigation if there’s an unforeseeable event, like a hurricane, that makes it impossible to abide by the stated deadline or a sudden and unexpected increase in prices that raises the cost of a project.

Breach of fiduciary duty

For someone to be guilty of a breach of fiduciary duty, there has to be a legally recognized relationship that requires them to act in the best interests of another party to a contract or a larger entity. People and business entities that are named executors or trustees in an estate plan, for example, have a fiduciary duty to the estate and beneficiaries. Business partners have a fiduciary duty to their fellow partner(s) and the business itself. Breaches of this duty often involve someone engaging in “self-dealing,” or making money at the expense of those to whom they have a fiduciary duty. Negligence and incompetence can also potentially constitute a breach of fiduciary duty. To prevail in a legal action involving either of these breaches, a plaintiff needs to show that they suffered or are likely to suffer financial harm. The longer a breach remains unknown or is ignored, the more damage the breaching party is likely to do. That’s why it’s critical to get experienced legal guidance as soon as possible.

When a signed contract is deemed invalid

2025-12-14T18:02:39Z

Most people sign contracts believing they’ll bring certainty. After all, a signature is supposed to mean that everyone is on the same page and ready to move forward. So, it can be deeply unsettling when that certainty suddenly vanishes overnight. Being told that a signed agreement is suddenly “invalid” can feel confusing, frustrating and overall unfair.

Understanding claims that a contract is invalid

When one party claims a contract does not exist or should not be enforced, it is rarely as simple as they make it sound. These arguments may involve allegations such as duress, misrepresentation or claims that key terms were missing or misunderstood at the time of signing. In some cases, a party may argue that they did not have the legal capacity to enter into the agreement or that the contract violated public policy. These disputes can feel personal, especially when trust was involved. People may feel blind sided when a business partner, employer or other party suddenly denies obligations they once agreed to in writing. While these claims can be extremely emotionally draining, they are also very fact-specific and depend heavily on the circumstances surrounding the contract’s creation. Documentation becomes critical when fighting claims of invalidity. Emails, text messages and witness accounts can all help show that both sides understood and accepted the agreement. Courts often look beyond the signature itself to determine whether there was a true meeting of the minds and whether the agreement was carried out as intended. Timing and strategy also matter. Allowing a claim of invalidity to go unchallenged can weaken a position over time, especially if deadlines are missed or evidence is lost. Addressing the issue early can help preserve rights and create clarity before the dispute escalates into prolonged litigation or financial loss Contract disputes can feel overwhelming, particularly when the foundation of a signed agreement is suddenly questioned. Speaking with a knowledgeable legal professional can help you understand your options, protect your interests and work toward a resolution that brings stability and peace of mind.

When does an unpaid commercial debt become a legal claim?

2025-11-27T16:20:08Z

Not all your clients pay their debt on time. This situation can be frustrating, especially when you need to maintain cash flow in your business. Understanding when a simple commercial debt turns into a formal legal claim can help you plan your next move.

The transition lies in a breach of contract

Technically, you can file a legal claim against your client once they fail to meet the payment terms in your written contract. If they fail to settle their debt on the specified date, it constitutes a breach of contract. This breach can result in damages to your business, which allows you to sue for full recovery.

The action plan you must take after a breach occurs

While filing a case is an option, consider treating it as a last resort, as it can be a costly and lengthy ordeal. Instead, establish a paper trail that demonstrates good faith, which includes these steps:

Review your contract: Check the payment terms, clauses and other essential information.

Send a demand letter: Inform your client about their outstanding balance and demand payment by a specific date while referencing the contract.

Grant a cure period: Give your client the appropriate time to fix their breach according to your contract, if applicable.

When executing these steps, always maintain open communication with your client. Not only can this clear misunderstandings, but your conversations can serve as evidence.

Escalating to litigation

If your client refuses to settle or negotiate their debt, filing a lawsuit can help you address the unresolved issue. However, you must do so within five years to avoid having your case dismissed. Consider seeking legal counsel from a business law attorney to help you navigate the legal process.

Did a commercial landlord violate an exclusive use clause?

2025-11-25T04:03:19Z

Frequently, commercial real estate litigation begins with a landlord’s concerns. Landlords may initiate legal proceedings to evict a tenant or collect unpaid rent. However, tenants also have protection under the law. They can ask the civil courts to enforce a lease if their landlord violates the agreement. Landlords could violate a lease by failing to maintain the facilities or ignoring the right of first refusal extended to an occupant when listing the property for sale. Commercial tenants could also hold their landlords responsible for damaging their business prospects if they have the right clauses in their leases. If a tenant signed a lease with an exclusive use clause, the arrival of a competitor at the same facility could be grounds for litigation.

What is an exclusive use clause?

An exclusive use clause effectively protects a tenant from operating in close proximity to a business that performs the same functions. An exclusive use clause could prevent a landlord from leasing two units in the same shopping mall to different shoe stores, for example. If a landlord rents a nearby or adjacent unit to a business in the same industry that offers the same goods and services, the commercial tenant who signed their lease earlier may have grounds to take legal action. The violation of an exclusive use clause could cause a significant decrease in company revenue. Tenants could seek damages. They could also ask the courts to allow them to terminate the lease. Reviewing a commercial lease can help frustrated business tenants understand their options. When landlords don't respect the terms of the leases they signed, tenants can sometimes take action to hold them accountable.

Does price fixing constitute an actionable business tort?

2025-11-19T17:55:12Z

Business torts involve civil misconduct by organizations that affect other parties, including other companies. Business torts may provide the basis for commercial litigation if the affected party can prove their allegations in court. When one company causes provable harm to another business, a lawsuit can help remedy the issue. Business leaders can take legal action in response to tortious interference with business contracts and defamation. They may also be able to ask the civil courts for support when they face unfair competition. Unfair competition can involve a variety of different inappropriate activities. Does a price-fixing scheme meet the necessary legal standard to justify litigation on the basis of a business tort?

Price fixing is unlawful and harmful

Federal antitrust regulations address price fixing and other attempts to manipulate the market. Technically, businesses and service providers have the authority to price their goods and services however they choose. However, their decisions can represent unfair competition in scenarios where they attempt to damage a competitor’s market share. Price-fixing schemes involve two or more professionals or business owners working cooperatively to manipulate the market. Often, price fixing involves undercutting a successful company’s pricing, possibly by lowering prices to an unsustainable point. The goal of price fixing is to push out competition and force competitors to relocate or close. Those with evidence that competitors cooperated to manipulate pricing and consumer decisions may be able to take legal action against competitors involved in the scheme. Discussing suspicions of price fixing with a legal professional can help frustrated business leaders evaluate their options, including business litigation.

The 2 main types of defamation

2025-10-29T16:08:28Z

We recently discussed how defamation from a competitor can harm your business. Certain statements could cause significant harm to your reputation, perhaps eroding your customer base and costing you sales. You may even see this as a form of fraud if the other party is simply trying to influence your customers to shop at their business – and they are using defamation as a tactic to do so. If you are considering taking legal action, one important thing to note is that there are two different types of defamation: libel and slander. How are these similar, and how are they different?

Written or oral statements

These are similar because they are both forms of defamation, where someone is knowingly making false statements about you or your company. The difference lies in how those statements are made. A written statement counts as libel, while a spoken statement counts as slander. This distinction has become more complicated over the years. Is something written on social media considered a written statement or something that a person “said”? Fortunately, this issue has been addressed, and it actually started with radio broadcasts. What the courts essentially determined was that libel is something that is relatively permanent. This could include a spoken statement during a podcast or a recorded radio broadcast. It could also involve a written statement or a video posted to social media. If something is not permanent, then it counts as slander because it is just something that people are saying in the moment, rather than recorded statements that could be broadcast to a much wider audience. Either type of defamation can cause significant harm to your business, so take the time to look into all of your legal options.

Do commercial leases give you the right to change your business?

2025-10-08T17:04:48Z

Business plans do not always work out as hoped. Those who succeed frequently experience many setbacks along the way. It’s often said that those who can change and adapt the quickest are more likely to survive in business than those who can’t. Staying lean and flexible is not always easy when you need a physical premises to operate. Landlords want a stable income, so they don’t want tenants who are there one day and gone the next. Typically, they will insert clauses into their lease agreement that obligate the person or company leasing the premises to pay for a minimum period, whether they occupy the place or not. If they wish to leave early, they would either have to pay the remainder of the contract or pay a prohibitive one-off penalty. Astute business owners might decide that while their original idea is not working out, another business idea could function in these same premises. Do they have the right to switch to another type of business?

It depends on the situation

There is no one-size-fits-all answer to this question, and moving to another line of business is not always allowed. Sometimes, it is the local planning authorities who prohibit it. For example, let’s say you open a clothing store in the space you lease and wish to change to running a takeout there instead. Zoning laws might not allow places selling food on that block. While you could apply for an exception, there is no guarantee you would get it. The owner of the premises might also try to stop you. They may have put a use of premises clause in the contract you signed that limits what types of businesses are allowed. Maybe there is no clause, but they insist that you cannot make the change. If you find yourself in a dispute over your commercial lease, it’s wise to get experienced legal guidance to explore your options.

What is a force majeure clause in a contract?

2025-09-19T15:17:42Z

Contracts are written agreements between two parties to hold both sides accountable. Businesses often use these as they conduct various transactions. Every contract contains several clauses and terms to ensure that both sides fully understand what they’re responsible for and what to expect from the other party. One clause that’s often present is known as the force majeure clause. This clause can protect businesses when extraordinary events make it impossible to fulfill contractual obligations. Understanding how these clauses work may be beneficial to those who are entering into a business contract.

What qualifies as a force majeure?

In the most general sense, a force majeure clause covers events that aren’t under the control of either party. This can include things like government restrictions, acts of war, natural disasters and labor strikes. The key is that the covered event can’t be foreseen and must be truly and totally disruptive. For example, a hurricane that shuts down a supply chain could excuse performance if that was part of the force majeure clause.

Why is this important?

If there’s no force measure clause, a business might still be liable for breach of contract, even if the performance was wholly impossible. By having a force majeure clause in place, they can often avoid financial penalties or lawsuits during a crisis. This provides a safety net that ensures that if a disruption does happen, the business isn’t punished for circumstances beyond its control. It’s critical that anyone who is dealing with a possible contract breach fully understands all of the terms within the document. Only then can they make an informed assessment of the situation and their options.

4 types of contract breaches

2025-09-04T17:17:11Z

Contracts are essential legal documents that set the terms of a professional business relationship. There are many different kinds of business contracts, including contracts that determine the goods or services a party is legally obligated to provide to another party. The terms of a business contract can determine the length of a professional relationship, the responsibilities of each party and what parties are meant to receive for providing a good or service.

An issue with a contract or a party’s failure to comply with the terms of a contract can lead to a breach. There are four kinds of breaches that can occur, including the following:

1. Minor breach

A minor breach occurs when the terms of a contract are mainly fulfilled, but a slight issue occurred that led to minimal damages. For example, a common type of minor breach happens when the completion of a construction project happens slightly later than the date specified in a contract.

2. Material breach

A material breach happens when the specific product or service specified in a contract is different from what is given. For example, a construction company may have installed the wrong windows in a new building. This type of breach can lead to serious damage.

3. Anticipatory breach

An anticipatory breach occurs when a party is not likely to fulfill their contractual obligations. For example, a party may know that the delivery of wood for a house will be late and could delay the other party’s plans. The breaching party can notify the non-breaching party to terminate or renegotiate the terms of a contract.

4. Actual breach

An actual breach happens when a party does not complete their contractual obligations or perform their duties correctly.

Businesses can explore their legal options to remedy a contract breach. Legal guidance can help businesses renegotiate the terms of a contract, terminate a contract or seek damages caused by a breach.

What is bait-and-switch business fraud?

2025-08-22T12:32:09Z

A bait-and-switch is a type of fraud that often targets consumers, or even other business owners. It is a trick used to make sales, and the purchaser may then realize that they have been deceived after the fact. Often, a bait-and-switch starts with the advertisement of an attractive deal, such as a significant price cut on a certain popular item. Consumers are told that the item is in stock, and the advertising material makes it clear that they will get a good deal if they make a quick purchase, influencing them to buy. But when they arrive, the deal is not as advertised. Maybe the product is actually much worse than was advertised or does not do what it claimed. Maybe the product is not even in stock and never was. The business just wanted to get people in the door, and then they will try to upsell them to a more expensive product once they arrive.

How could this affect your business?

As a business owner yourself, you could still be victimized by bait-and-switch. For example, maybe you are looking for a parts and material supplier for your manufacturing company. You find a deal on materials that cost half as much as the ones you are currently buying—but are advertised to be just as good. When they arrive, you get a clearly inferior product, or the parts and material supplier tells you that those specific items are out of stock and tries to upsell you to another item that is even more expensive than what you were already purchasing. This type of fraud can have a serious impact on your business’s financial position and may be a violation of your rights, so be sure you know what legal steps to take.