Attorney

Serving West Virginia and Ohio

Breach of Contract

Simply put, a contract creates certain obligations that are to be fulfilled by the people or companies who entered into the agreement. When a party fails to fulfill their obligations under a contract, this is known as a breach of contract. A breach can occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all. A breach of contract will usually be categorized as either “material" or "immaterial" for purposes of determining the appropriate legal solution or remedy for the breach.

Material Breach - Any failure to perform that permits the other party to the contract to either collect damages or compel performance because of the breach.

Immaterial Breach – Occurs when the non-breaching party is not entitled to an order for performance of its obligations, but only to collect the actual amount of their damages.

To illustrate the difference, suppose a homeowner hires a contractor to install new plumbing and insists that the pipes (which will be sealed behind the walls) be red. The contractor chooses to use blue pipes that function just as well, or better. This is an example of an immaterial breach - although the contractor breached the literal terms of the contract, no damages were inflicted, and the homeowner receives nothing. If the contractor had been instructed to use copper pipes, but instead used iron pipes (which do not last as long as copper pipes) the homeowner can recover the cost of actually correcting the breach - replacing the iron pipes with copper pipes. This is a material breach.

What Happens after a Contract is Breached?

If informal resolution attempts fail, the most common method used to resolve contract disputes and enforce contracts is through lawsuits and the court system. If the amount at issue is below a certain dollar figure - usually in the range of $3,000 to $7,500 depending on the state - the parties may be able to use small claims court.

No matter what avenue is chosen to remedy a breach of contract, the non-breaching party will most likely be entitled to some kind of remedy under the law. If you live in West Virginia or the Southern Ohio region and believe you might have a breach of contract case, please contact the law offices of Jan Dils & Jim Leach.