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What Constitutes a Breach of Contract?

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In Florida, a contract is formed when the applicable elements are present — offer, acceptance, and consideration. These agreements are meant to be enforced by law. A breach of contract is when one party doesn’t perform one or more of the requirements of this agreement.

For there to be a breach of contract, the following elements must exist:

  • There is a valid agreement that was entered into by both parties; preferably the contract is in writing;
  • There was a breach of one or more of the contract’s obligations; and
  • The plaintiff suffered damages as a result of the other party’s breach.

Breach of Contract in Commercial Litigation

Breach of contract is a common reason for litigation between companies, which falls under commercial litigation. Deciding how to proceed can be determined by how serious the breach is. A breach of contract is typically classified as a minor or material breach.

A minor breach is typically something inconsequential that does not affect the overall execution of the contract. A material breach is one that causes a total and irreparable break of the agreement. It often means one party completely defaulted and failed to abide by critical terms of the agreement. Determining whether or not it was a material breach is important, because it can affect compensation and it may provide an opportunity to cancel the contract.

Remedies for a Breach of Contract

The remedies in a breach of contract matter can vary based on the specifics of the case. The main remedies include financial compensation or equitable remedies. Monetary damages can include:

  • Compensatory Damages: Designed to reimburse the plaintiff for the economic losses they sustained from the breach of contract
  • Liquidated Damages: If specified in the contract
  • Special Damages: Special damages or consequential damages are awarded because the other party breached the contract

Equitable remedies differ from monetary damages which are designed to compensate the plaintiff for existing and/or future losses. Equitable remedies are court-ordered actions or inactions that the defendant is required to follow.

Some commonly awarded equitable remedies can include:

  • Reformation of the contract, or rework the current contract to have it reflect the intended terms of the parties
  • Termination of a contract or rescission of a contract
  • Specific performance, which is when a court will force the party who breached the contract to uphold the original contract

How to Resolve a Breach of Contract

If you want to resolve a breach of a contract case quickly, alternative dispute resolution might be a preferable option rather than a lengthy drawn out commercial litigation trial, especially if there are business relationships you want to preserve.

Retaining a skilled Florida commercial litigation attorney is essential if you have a breach of contract dispute. For assistance in Palm Beach, Broward or Miami-Dade County, or statewide, contact the experienced team at Pincus & Currier LLP in West Palm Beach to schedule a consultation.

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