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What is breach of contract?

For any Illinois business, it is common practice to enter into contracts with customers, vendors and other outside parties. For example, a restaurant could sign a contract with a produce supplier. In some cases, workers and employers sign employment contracts. It would be very difficult to do business without contracts.

Simply put, a contract is an agreement in which a party promises to do something for another party, in exchange for compensation. A good contract will provide clear details about each party’s rights and obligations, so that the possibility of dispute later is minimal.

Still, sometimes a business is accused of breach of contract, or finds that the other party to its contract has broken the agreement somehow. When this happens to a business owner, it is important that he or she understand his or her rights, and who, if anyone, appears to be at fault.

When a breach of contract case goes to trial, the judge must determine two things:

1. Was there a contract breach?

2. If so, was the breach material or minor?

To prevail at trial, the plaintiff must successfully show several factors. These include:

  • A contract existed.
  • The contract required certain things of the parties.
  • The defendant breached the contract.
  • The breach was material.
  • The plaintiff suffered damages as a result.

There are several factors to consider when deciding materiality. For example, was the product or service provided by the defendant substantially different from the contract specified? What was the hardship to the plaintiff? Was the defendant’s conduct negligent or willfully in breach?

There is much more to the law related to breach of contract, of course. Those who want more information may wish to speak with a business and commercial law attorney.

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