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How Contract Breaches Affect Small Businesses

If you are among the 2.5 million small business owners in Florida, as reported by the US Small Business Administration for 2018, there is a chance that you may be involved in a breach of contract situation at some point in time. Whether you are dissatisfied with another company’s performance of its obligations, or are accused of not upholding your end of the bargain, contractual disputes are quite common.

However, not all breach of contract issues must go to court. There are ways to resolve disputes without the time and expense of litigation. A Clearwater, FL contract law attorney can tell you more about your options, but you may find it helpful to review some basics.

Elements of a Breach of Contract


For a breach to exist, there must first be a valid contract, which involves offer, acceptance, and consideration. Some types of contracts must also be in writing. Beyond this requirement, other essential elements include:

  • One party’s failure to comply with the terms of the agreement;
  • Money or other item of value lost by the party not in breach; and,
  • A direct connection between the failure to perform the contract and losses suffered by the aggrieved party.

Different Categories of Breach


Though the elements are relatively straightforward, there are multiple classifications of breach of contract. More than one may apply to your situation, depending on the complexities of the agreement and whether the contract is in writing.

  • Material breach is the most serious and may occur when one party fully performs, while the other does not. The most common scenario is when a seller provides products that conform to the contract, and the buyer accepts but does not pay. Material breach of contract often ends up in court.
  • Fundamental breach is a notch below material, as the aggrieved party may have the opportunity to cease performance before fully complying with contractual terms. Still, fundamental breach is often the subject of litigation.
  • Minor breach of contract may occur where one party partially performs or completes performance, but with some errors.

Remedies for Breach of Contract


Your legal options for a breach depend on various factors. For instance, there may be some provision in the contract regarding remedies or a Florida statute that designates how to handle a breach. Plus, in some situations, you can choose a remedy that suits your objectives, especially if you want to stay out of court.

  • The aggrieved party can overlook the breach and give the other a chance to fix it, perhaps with some incentive.
  • The parties can rescind the contract and return any items of value, essentially moving forward as if the agreement never existed.
  • It may be possible to reform the contract by starting from scratch, giving each party the chance for a do-over that more appropriately aligns with respective goals.

Discuss Breach of Contract Issues with a Florida Contract Law Attorney

While this overview may be useful, breach of contract matters are actually much more complex in practice. You should rely on an experienced legal professional for assistance, so please contact  Clearwater Business Law at (727) 785-5100 to schedule a consultation. We serve small business owners in Clearwater, St. Petersburg, and throughout Pinellas County, FL with all types of contractual issues.