Breach of Contract Disputes
Contracts only work when both parties agree to its terms and conditions. When one or more parties has an issue, a contract dispute can lead to a contentious court battle. Let’s take a look at the most common contract disputes and to prevent potential issues.
The Most Common Issue: Breach of Contract
When one party fails to execute the terms of the contract, a breach of contract occurs. There are several types of breaches; however, they generally fall into two categories.
Material Breach: One party fails in such a manner that the contract’s terms cannot be fulfilled. In this case, the affected party has cause to sue for damages.
Immaterial Breach: A minor breach occurs when the bulk of the contract is met, but some aspect of the contract has not been met. Importantly, this breach can still result in a suit for damages.
Other breaches involve when the contract is not fulfilled on time, or when an aspect of the contract is not met according to the parameters laid out by the contract. Similarly, failing to fulfill the contract wholly is also a breach of contract.
In any case, breaches of contract open up one party to the potential for a lawsuit to award damages or the ultimate fulfillment of the contract. Mediation is often pursued before filing a lawsuit, and if that fails, binding arbitration is another method to avoid a lawsuit. These two methods can bring about resolution in a few ways.
The most common fixes are:
- Cancelling the contract and provide restitution.
- Requiring Specific Performance, which requires the party at fault to fulfill the contract instead of pay damages.
- Awarding damages.
Contract Disputes with the US Government
The Contract Disputes Act of 1978 intended to set up an impartial and clear process for contractors and government bodies to resolve contract disputes. In order to achieve this, the act requires both parties to work to reach resolution at the lowest court level possible. The contracting officer’s final decision can be challenged in higher courts, including the Board of Contract Appeals and the U.S. Federal Claims Courts. The decisions of these institutions can also be appealed in the U.S. Federal Circuit Court of appeals and the U.S. Supreme Court. Every effort should be made to avoid this level of appeal.
Other Contract Issues
Breach of contract isn’t the only issue that can lead to legal intervention when it comes to contracts.
Some other common issues include:
- The offer and acceptance of a contract.
- The definition of a term used in the contract.
- Drafting and review of a contract.
- Contract errors.
- Fraud or coercion with regard to acceptance, terms, completion, etc.
RESOLVING CONTRACT DISPUTES
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