When one party who previously agreed to a contractual obligation to another does not comply with those obligations or indicates intent not to comply, the other party may have a breach of contract remedy available. However, all breaches are not the same.
Minor Breach vs. Material Breach
Any breach of contract gives the non-breaching party a right to collect damages, but the question then becomes one of performance; that is, does the non-breaching party have an obligation to perform. Where the breach goes to the essence of the contract, it is considered material and the non-breaching party can immediately stop performance and sue for damages. Where the breach is minor, the non-breaching party must continue performance and later sue for damages based upon the minor breach. Factors involved in that determination include:
• Was the breach a mistake, negligent or intentional
• How much of the contract has been performed
• How likely is it the rest of the contract will be performed
The key issue in an anticipatory breach is whether or not the actions or statement of the breaching party is unequivocal or less so. Where unequivocal, the non-breaching party has the option of treating the anticipatory breach as immediate and assess whether it is a minor or material breach.
Breach of Contract Remedies
The vast majority of cases for breach of contract are settled for monetary damages, but certain circumstances may call for other remedies, such as:
• Injunctive relief
• Specific performance
Finally, the non-breaching party has a duty to mitigate damages by taking reasonable actions when it becomes aware of the breach.