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How Contract Breaches Affect Small Businesses

Written on January 22, 2019

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.

 

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I strongly endorse Andrew Mongelluzzi. He is a very skilled and able business attorney focused on customer service and results. On the front end, Andrew deftly advises new businesses on organizing properly, acquiring necessary licenses, contracting with vendors & customers, and dealing with various compliance issues that may arise. On the back end when things go south, Andrew counsels and navigates businesses through complex commercial disputes and aggressively represents them in negotiations, mediation, arbitration, and in litigation so that businesses can legally move on and get back to business. Andrew’s ability to identify legal issues and approaches to resolve business-related issues is a strength that I have learned from and professionally relied upon in approaching the business matters and cases that I handle. I regularly refer business to Andrew knowing that he will diligently represent his business clients and their best interests.
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Attorney Mongelluzzi and his team provided excellent and quality service. I always felt that my needs were met and that the firm was invested in me and my case. The quality services I received at Mongelluzzi’s firm were remarkable. From the initial meeting they were responsive to my calls, questions and concerns. All issues were handled professionally and timely, easily accessible, got back to me quickly, aggressive and got me the results that I wanted. Attorney Mongelluzzi and his staff all gave my case their personal attention and provided the quality of work that anyone would want when hiring an attorney.

- Client

Andrew is very thorough defining the outcome expectations. In my case, it was setting up a new corporate entity. He advised me on the most beneficial option and he then executed on that path. Andrew is a very pleasant person to work with. He is determined, skilled and committed to his client’s success.

- Gil Pinney

Andrew helped me through a difficult situation with American Express and we won the case. A great job by Andrew! He also helped me with T&C’s in my company. I would recommend Andrew highly as an attorney.

- John Sams

As a business owner for 12 years I have seen my fair share of ups and downs. Some of the downs would include landlord/tenant disputes and creditors that may have not been fulfilled to agreement. Andrew has met both of these situations for me in a timely, positive, and affordable manner.

- Rich Mattes

It was very nice to have a lawyer who not only is fierce in negotiations but has been successful in business. This is a lethal combination. I was glad he was on my side.

- Nigel Castanheiro

Andrew helped me with a contract litigation case. The lawyers battled it out for over a year and we finally got a reasonable settlement offer. Then the other side tried to back out. Andrew figured out how to force the other side to honor the deal and really knows his way around the court system. Definitely feel comfortable using him again.

- John Ellis

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