As a business owner, head of a corporation or board of directors, you probably know some basics about what goes into making a valid contract such as: offer, acceptance and consideration. Of course, contracts are not as simple as those three key terms. Other factors, such as the capacity of the parties, whether it was written or verbal, and whether or not it is legally valid, etc., also frame the agreement. While contract law varies state to state, and there are differences in whether the parties are contracting for goods or services, the basic elements mostly remain the same-including when a breach occurs.
When one or both parties do not comply with all or part of the contract, it is considered a breach. Most contracts will be controlled by state laws and the terms outlined. In some cases, however, the Uniform Commercial Code (UCC) will govern.
Remedies can be sought and defenses can be made for a breach regardless of which sector rules. For example, common defenses are: mistake of fact or law, fraud, duress, or failure of a party to perform. However, common remedies include: ordering the non-complying party to perform specific duties, as well as the ability to recover certain damages. Remedies and defenses will vary based upon the type and terms of the contract.
Business owners have more important things to do than spend their valuable time sifting through contract law. If you are considering breaching a contract or believe a breach has occurred, determining all the rules, regulations and terms can be a daunting process. Speaking with an experienced attorney familiar with business laws and litigation will help navigate you through.