Businesses in Illinois and elsewhere enter into agreements with hopes to benefit them. Whether it is a simple business agreement or a major business deal, the terms of this business contract are essential. If a party to the agreement does not adhere to these terms, then issues could arise. In some cases, a breach occurs, causing the non-breaching party to bring about a legal action.
What is a breach of contract? To begin, a business contract is a document that outlines the obligations that are to be fulfilled by the parties entering into the agreement. When a party to the agreement fails to fulfill any part of its contractual obligations, this is known as a breach.
While it is dependent on the situations, a breach could occur when a party fails to perform its obligation on time, fails to perform in accordance with the terms outlined in the agreements or when a party fails to perform at all. And when a breach occurs, it will be categorized as being either material or immaterial, as this helps determine the appropriate remedies for the breach.
A material breach refers to an essential component of the contract being breached. On the other hand, an immaterial breach is a non-essential term being breached. In both cases a breach occurs. However, the damages experienced in a material breach can be much more significant.
The remedies for a breach of contract can include damages, such as compensatory, punitive and nominal damages. It can also be specific performance, which is when the breaching party is still required to fulfill their contractual obligations. Finally, there could be a cancellation and restitution, which refers to the contract being cancelled and restitution to the non-breaching party being ordered.
Business litigation could ensue in different situations. When a breach of contract occurs, it may be necessary to litigate the situation in order to resolve and remedy the matter. Thus, it is important to understand this process and what rights one is afforded in the situation.