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Consequences Of Breach Of Contract

Consequences Of Breach Of Contract

Consequences of breach of contract

When you sign a contract, you and at least one other party enter a legally binding agreement to adhere to the terms of set out in the document. Common contracts include employment contracts, tenancy agreements and service contracts to name just a few. If you or the other party has breached the terms of a contract, this article covers the consequences you can expect as a result.

What Are The Consequences Of A Breach Of Contract? The consequences of a breach of contract will depend on the severity of the breach in question and the scale of damage caused to the other party as a result of the breach of contract. If an individual or company has breached the terms of a legally binding contract held with you, the first thing you should do is to contact a solicitor. A solicitor will be able to determine if it is in your interests to pursue a claim for breach of contract and will work with you to seek the best outcome possible for you.

You have the right to seek legal advice if the terms of a contract you hold have been breached by another party. At Hattons Law we have a team dedicated to investigating and securing compensation for breaches of contract and we can assist you with pursuing claims for damages suffered as a result of a breach of contract you have experienced.

Discuss your case with Hattons today 

Read on to find out more about the consequences of a breach of contract, what you should do if you experience one and where to get advice to secure the best outcome possible for you. 


What Is A Contract?

In its simplest form a contract is a legally binding document between two or more parties. A contract will set out and govern the duties of all parties in the agreement, and the terms agreed to are enforceable by law. Contracts can also be verbal but for the purpose of this article we will focus on written contracts.


What Is A Breach Of Contract?

A breach of contract occurs when any of the terms agreed upon in a contract are broken or not upheld by any of the parties bound by the terms of the contract. Examples of a breach of contract include, failure to make a payment within an agreed time-frame, failure to deliver the goods and services agreed upon, or failure to perform the duties set out in the contract to the required standard.

A Breach of contract is likely to have taken place when:

  • Defective performance exists because the terms of the contract are only partly performed or are not performed to the required standard.
  • Delayed performance exists because the terms of the contract surrounding time frames for delivery or compliance are violated
  • When one or more parties completely fails to satisfy the terms of the contract agreed.

What Happens If A Contract Is Breached?

What happens in a breach of contract?

The consequences of a breach of contract will depend on:

  • the action you take when you become aware that a breach has occurred
  • the severity of the breach in question
  • the type of contract term which has been broken
  • any clauses set out in the original contract for dealing with a breach of contract
  • Whether the contract is legally enforceable

If there is no provision in the contract for dealing with a violation of the terms within it, then the parties involved may choose to settle the situation among themselves or instruct the services of a solicitor to act on their behalf.

Managing A Breach Of Contract Informally

You may be able to resolve an issue surrounding a breach of contract with a discussion between the parties involved. If these informal discussions don’t provide a satisfactory outcome for all involved, then you can instruct a solicitor to act on your behalf.

However, a word of caution.  It is important that you do not act in a way that could be taken as you having accepted or affirmed the breach, because if you do, then you may have lost the chance to rely upon the breach and take action.

Managing A Breach Of Contract With A Solicitor

You should contact a solicitor to manage a breach of contract if you:

  • have been unable to resolve a breach of contract with informal discussions between the parties involved
  • decide to enforce the terms of the contract through legal proceedings
  • decide to seek compensation for the losses incurred as a result of another party breaching the terms of the contract held with you

In order to bring a claim for breach of contract against another party you must be able to prove that a contract existed and that a breach of the terms within it has taken place.

To make out a claim for breach of contract, you need:

  1. a legally binding contract,
  2. non-compliance with one of the legally binding terms of that contract which could be an express term, or implied term of the contract.

Related Questions

How Much Compensation Can I Receive For A Breach Of Contract?

The level of compensation you could receive if you pursue a successful breach of contract claim will vary from case to case. It will however be based on the type of contract that was breached and the type of loss that was incurred as a result.

If you are seeking financial compensation, the figure reached in a breach of contract settlement claim is designed to put the party seeking damages in the position it would have been if the contract had been upheld in the first place.

For example, if you are a landlord and your tenant has left your rental property with outstanding rent payments due, a successful breach of contract claim would award you the sum of the outstanding rent plus any further loss that occurred as a result of them leaving outside of their tenancy terms. This might include the cost of re-marketing the property for rent for instance.

It’s worth noting that compensation for breach of contract doesn’t have to have a monetary value to it. Sometimes the most successful outcome of a breach of contract case is for the aggrieved party to be able to legally end the contract early with no repercussions due to the breach of contract that took place by the other party.


Find Out More

We hope this article has helped you to understand the possible consequences of a breach of contract and the actions you can take to help you rectify a breach of contract against you.

If you decide that you want to pursue the a formal breach of contract claim or seek damages owed to you as a result of another party breaching their contract with you, please use contact form here or call 01744 744400 to speak to our friendly team of solicitors specialising in these matters.

Hattons Solicitors is based in St Helens, Merseyside and the firm has been providing efficient, affordable and high quality legal services to members of the public and the wider business community since 2001. Professional excellence and quality of work is reinforced by our Law Society Lexcel Accreditation, and membership to the Law Society. Our friendly team will always listen to you and your needs before working with you to deliver the approach that best meets your individual needs.

Posted on: 27/Nov/2020 Posted in: Employment Law
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