What are the 4 types of a breach of contract in San Diego and across California? What should you do if you become involved in a contract related business dispute? Breach of contract disputes are unfortunately quite common. A contract is breached the moment one of the parties fails to fulfill the obligations they’ve agreed to in the terms of the agreement.
Key Takeaways About the 4 Types of a Breach of Contract in San Diego and Across California
- What is the difference between an actual, anticipatory, minor (partial), or material breach of contract in the State of California?
- What are the steps every business and professional should take to avoid a breach of contract?
- What are the available options to resolve the 4 types of a breach of contract in San Diego and across California?
Types of Potential Contract Breaches
Here in California, a breach of contract generally occurs when the obligations or responsibilities of one party aren’t fulfilled according to the specific terms of the agreement in a timely manner or when issues of payment arise. These types of cases are known as “actual breaches.”
Examples of an actual breach include disputes regarding the quality of materials or poor workmanship, the failure to make a scheduled payment, the failure to perform the duties or responsibilities contracted under the agreement as well as any issue associated with time such as a time frame for completion of a phase or project, a missed delivery date or the failure to perform any action or duty required by the agreement.
There are occasions when one of the parties realizes they will not be able to fulfill their obligations under a contract. They are generally required to provide notice to the parties in the contract of their inability to complete their responsibilities. This is known as an “anticipatory breach.”
In other examples of a breach of contract in San Diego or across California known as a “minor breach” or “partial breach,” occurs when a specific portion of the contract was unfulfilled even though the other party received the “benefit of the bargain.” A “material breach” occurs when one of the parties to the contract gets something substantially different than what was originally contracted for. For example, the contract specifies a specific color and model of a product and the supplier delivers a product from a different manufacturer with a similar widget in the right color but without a all of the exact specifications of the originally specified product. In a material breach, one of the parties fails to provide an essential service or product they committed to as part of the contract.
A Strong, Well-Crafted Contract Can Help to Avoid a Contract Breach
A strong, well-crafted business contract should not only clearly establish the “benefit of the bargain” sought by each party, but anticipate every possible challenge that might arise and provide a specific remedy for each challenge. However, some events or challenges may not be foreseeable. Some examples of a breach of contract anticipated by one of the parties might revolve around issues of supplier performance, disabling illness or injury of a key individual, a natural catastrophe (such as a wild fire, flood, tornado, or hurricane) or armed conflict.
With the exception of real estate disputes, one party cannot generally force another party to live up to the terms of the contract (known legally as “specific performance”). The relief for a breach of contract is monetary, and comes in the form of “damages.” The experienced breach of contract and business litigation attorneys at the Watkins Firm bring 40+ years of experience serving the business, science and tech, real estate and medical / healthcare communities here in San Diego and across California. Our attorneys work to quickly and accurately assess the facts, construct a thoroughly documented chronology of events, as well as a mastery of any potential damages. Damages are the key to resolving breach of contract cases. They provide the leverage to draw opposing parties into a constructive negotiation in order to reach a resolution of the contract dispute. You should know the Watkins Firm is able to resolve the vast majority of our breach of contract dispute cases through effective, leveraged negotiation. This is the fastest, and least expensive route to resolve any breach of contract case.
It is also important to note that a party who is the victim of a breach of contract has a legal duty under California law to mitigate the damages in a timely, prudent and reasonable manner. The failure to do so can prevent them from recovering for their losses down the road.
Pro-Tip: “What’s the difference and what’s the remedy if someone commits a minor breach contract versus a material breach?
Well, a minor breach means that you still have a contract. You still have an agreement and you can demand performance, or you can demand that you have to give less performance on the other side, but yet the contract isn’t completely breached and it’s not over. A material breach gives you more remedies, remedies that are important and may sound minor today. But there’s been many a situation where having a material breach gives the party who was breached or damaged the right to rescind the contract or the right to specific performance, and forced the performance of the contract. All of these things have amazing consequences, if you look at factual situations in breach of contract law.
So in a material breach, the non-breaching party no longer has to obey the terms of the contract? That’s what’s called choice of remedies in a material breach. The person who’s been damaged by the breaching party has all kinds of choices they can make. And depending on the kind of contract, the subject matter of contract, whether it’s a real estate contract or a commercial contract, they have the right to choose through a whole list of remedies, including provisional remedies and the list goes on and on. This is as opposed to a minor breach. Whereas your remedies are, much less diverse.
The primary remedy for a breach of contract in California is damages. That’s the term a lot of people don’t understand. We are often asked: ‘What are damages?’ Great question! When I advise my clients, I tell them the most important item in litigation is not whether you are liable or they’re liable, or somebody breached. I say the three most important things in a lawsuit are: damages damages damages.
And I say, it just like, you know, location, location, location, because it’s that important in the type of damages you can obtain are so varied that if you focus on whether you’ve been damaged under the law, there will be a statute or a case that says you are entitled to those damages. So if you track it backwards from I lost a hundred thousand dollars in this deal and how you lost it on those facts and what you did lose, you’ll probably find 99% of the time, a statute or a law or a case or something that gives you a remedy, a right to those damages and how you can collect.” – Dan Watkins, Founding Partner
4 Types of a Breach of Contract in San Diego and Across California
While we have attempted to provide some examples of the 4 types of a breach of contract in San Diego and across California, it is not possible to provide an exhaustive list. If you are concerned about a breach of contract we invite you to review our podcast Episode 5 – Breach of Contract as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
Learn how the Watkins Firm can help to resolve a breach of contract in a cost-effective and timely manner.
Meet Dan Watkins:
Daniel W. Watkins is a true people person who sincerely listens. He cares about things that occur in other people’s lives. Dan enjoys digging into the facts and finding creative solutions to problems. He is not shy about giving his opinion either.
Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.
Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a seasoned litigator and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.
He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.
THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR
Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.
In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.