A contract is a legally binding agreement between two or more parties. Parties may agree that one party is responsible for supplying a service or product, which is detailed in a contract. These outlines can include when a service or product is expected to be supplied, what materials are to be used, how long a party has to complete their duties and how a party is paid for fulfilling their obligations.
There are three elements to a strong contract:
- The contract must be clear. Any confusion about language should be addressed before signing a contract.
- Expectations from each party should be outlined. Each party should know that they can complete their responsibilities.
- The contract must be legal and include each party’s signature.
Contracts are meant to help make parties responsible for their end of an agreement. However, a contract can be breached. A contract breach often means that a party failed to fulfill their end of an agreement, which can happen in many ways. For example, the wrong kind of wood used to build a home, a shipment of fruits being delivered a day late or a service never being fulfilled are all forms of contract breaches. A breach in a contract can greatly disrupt business.
Can you avoid a contract breach? Here’s what you should know:
Taking precautions to avoid contract breaches
What many people want to know is if they can avoid contract breaches from happening. A contract breach can be prevented with a strongly drafted contract. A contract may even include a breach of contract clause to set expectations if a breach should occur.
A breach of contract clause clarifies that if a breach happens, then the responsible party is liable for damages. This often means that a party will need to pay damages and their relationship and obligations with the other party be discontinued. By including this clause, it can remedy any issues that a party could cause.
If a contract is breached and there is no breach of contract clause, the non-breaching party can still take legal action to recover from damages. It can help to reach out for legal guidance to navigate a contract breach.