Legally binding contracts are a vital element of doing business, regardless of the industry in which one operates. Agreeing to and formalizing the criteria under which a business relationship will proceed provides a measure of protection for everyone involved. However, when one party fails to abide by a signed contract, it is important to understand the steps one might take to restore order.

Types of Contract Breaches

Business contracts are put in place for a variety of valid reasons. Companies place employees, contractors, suppliers, distributors, researchers, and other contributing parties under contract in an effort to build, maintain, and protect a competitive edge in the marketplace. When a contract is broken, it usually falls into one of the following categories:

  • Material Breach – A rather significant contract violation that causes harm to one party, allowing them to collect damages from the other for their failure to perform as stipulated.
  • Minor Breach – While not as severe, this type of breach may still enable the offended party to collect damages.
  • Fundamental Breach – An extremely severe violation that allows the damaged party to terminate the contract and seek monetary reimbursement for harm caused by the breach.
  • Anticipatory Breach – This results when one party refuses to perform as directed by the signed agreement.

An Example Breach of Contract Case

Breach of contract lawsuits are common, since parties often disagree about the interpretation of a contract’s terms. A high-profile breach of contract lawsuit was filed earlier this year when one of the world’s largest beverage distributors learned that a former top employee left the company and immediately accepted a position with an industry competitor.

The plaintiff is alleging that by taking the new job, the former employee is violating a 12-month non-compete clause that was included in his employment contract. The plaintiff is further alleging that the former employee connected an external flash drive to his company-owned computer and downloaded a large amount of proprietary information related to pricing, distribution, and other vital business strategies.

Retain a Knowledgeable Silicon Valley Contract Attorney to Help Protect Your Business

A poorly researched and written contract may cause more damage than good. Using outside legal help with specific contract experience makes for good business. When it comes to protecting your company and its proprietary information, rely on the experienced business lawyers at SAC Attorneys LLP to provide in-depth contract knowledge. Our meticulous process ensures that all parties are treated fairly and protected in a way that allows a business to operate to the benefit of everyone involved. Contact our experienced San Francisco business law attorneys at 408-436-0789 to schedule a free initial consultation and discuss your business contract needs.