What is a Pennsylvania breach of contract?

On Behalf of | Mar 29, 2023 | Blog, Business Law

A Pennsylvania breach of contract occurs when someone fails to honor a legally binding agreement that they signed. The purpose of a contract is to establish the conditions and terms of a business agreement. The assumption is that all parties involved will uphold their part of the agreement. Failure to honor the contract is a breach that can result in a lawsuit.

Types of breaches

Business law recognizes several types of contract breaches. A material breach of contract occurs when an involved party refuses to honor any part of the contract. This is a major breach and is most likely to result in a serious lawsuit.

A minor breach is less serious, and the involved parties can possibly settle it with compensation or other forms of re-payment. An anticipatory breach occurs when one party admits that they likely won’t meet the obligations before the deadline.

Dealing with a breach of contract

The injured party may have the right to file a lawsuit and may thus be compensated for any damages or losses caused by the breach of contract.

Damages can include indirect and direct losses. These losses cover things such as lost income, lost business profit and lost business opportunities. The cost of finding someone new to do the contracted work can also count under damages.

If the breach of contract is unintentional, the parties involved can possibly solve the issue without legal action. For example, an illness or family emergency may have prevented the work. When this happens, renegotiating the contract or reaching a new agreement is possibly a solution.

A contract is legally binding

A breach of contract has serious consequences. If the parties involved are unable to reach a mutual agreement, a lawsuit can result. It’s important to understand the terms and conditions of a contract before signing on the dotted line.

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