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What are major and minor contract breaches? What’s the difference?

On Behalf of | Jan 12, 2021 | Business Law |

When entities enter into a contract with each other, both parties are expected to fully uphold their end of the deal. Most contracts are completed without any issues. The times when the contract isn’t followed, there is a breach of contract. This can sometimes lead to legal actions.

The method of addressing the breach depends on what happened and the terms of the contract. Some go to court while others are handled through mediation or arbitration. It’s also possible that the parties might be able to work out an agreement with each other that adequately handles the breach. 

How contract breaches can differ in severity

There are two primary types of contract breaches – major and minor. A major breach is sometimes referred to as a material breach. These are ones that are serious. For example, if a person hires a contractor to build an addition to the home but the contractor remodels the bathroom instead, a material breach has occurred. 

A minor breach is one that isn’t too serious. These breaches aren’t usually the subject of lawsuits; however, there might be other legal actions necessary to get the breach rectified. An example of this would be if a contractor uses the wrong shade of blue or if a project is completed a day late. 

Because of the legalities of contracts, having your attorney review a complicated matter is often beneficial. This is a chance for you to determine if there are any limitations or anything else you need to know about regarding how a breach is handled. No matter what side of the contract breach you are on, it’s wise to take the issue seriously from the start.