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Understanding breach of contract and possible remedies

On Behalf of | Jan 15, 2015 | Real Estate Disputes |

At the heart of most real estate deals is a contract and at the heart of most real estate disputes is oftentimes a breach of contract. Contracts commonly underlie a variety of business transactions, including real estate transactions, and contract breaches impact a number of business transactions. Contracts are found everywhere in everyday life. Because of the prominence of contracts is nearly every business transaction, it is important to understand how contracts are formed, and can be breached, and what to do in circumstances of a contract dispute.

In general, a contract represents an agreement between the parties concerning rights and obligations that are owed to one another. When a party fails to abide by or perform a duty under the contract, the failure may be a contract breach. Courts will oftentimes consider whether the breach was material or minor when determining what remedies may be available to the non-breaching party.

In circumstances when the breach of contract is considered material, the non-breaching party is no longer required to perform their obligations under the contract and may pursue legal remedies for the breach. When the breach is considered minor, the non-breaching party is required to perform under the contract but may have rights to remedies for damages caused by the breach. There are a number of factors used to determine if the breach is material or minor but the primary focus is on the nature of the benefit the non-breaching party has received.

A variety of remedies may be available in breach of contract circumstances, including remedies to compensate the non-breaching party for the breach which may entail both general and special, or consequential, damages. Contract disputes can be complex and, at the same time, hold great significant for the success of a transaction or business. Because of this, it is important to thoroughly understand contract formation and what constitutes a contract breach, as well as available remedies to help obviate the impact of the harm caused by the breach of contract.

Source: Judicial Education Center, University of New Mexico, “Breach of Contract,” Accessed Jan. 14, 2015


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