The unfortunate reality is that breaches of contract are a common occurrence. They plague businesses of all sizes, from startups to multi-billion-dollar corporations. This is perhaps not surprising, given that 39 percent of legal departments use non-lawyers to manage their contracts. Breaches of contract also occur in other areas of civil law. They range from the familial (child custody orders being ignored) to personal interactions (private individuals agreeing upon a sale or trade and later reneging) and everything in between. Breach of contract mediation is a smart solution to all types of breaches.
Here’s what constitutes a breach, and when mediation is in your best interest.
What is a Breach of Contract?
A breach of contract occurs when one party does not uphold their end of an agreement. There are four primary types of breaches: partial, actual, material, and anticipatory.
A partial breach (sometimes called a minor breach) is when one party to the contract deviates from it in a small way. Perhaps you have been ordered to pay $500 of child support each month but are only able to pay $300 one month. This would be considered a partial breach.
An Actual Breach
An actual breach of contract (also called a repudiatory or fundamental breach) is when one party deviates from the contract a substantial way. If you have a business agreement to replace a roof on the first of the month but are not able to replace it until several days later, you would have committed an actual breach.
This is when one party of the contract deviates from it in such a way that the existence of the contract itself is called into question. If you are getting divorced and agree to let your ex-partner have the home, but then take the home for yourself, you will have committed a material breach.
An anticipatory breach of contract is when one party gives notice (either verbal or in writing) that they will not uphold their end of the contract. If, for example, you have agreed to pay $2,000 for a rare book, but then tell the seller that you will only pay them $1,000, you would have committed an anticipatory breach.
Under Federal law, a contract is considered breached if the following three actions have occurred: a contract existed, one party breached it, and the other party suffered damages. It’s important to note that Florida law differs a bit from Federal and other state contract law. In Florida, the breach has to be material in nature. If it is not – if it is anticipatory, for example – the other party can argue that a breach did not occur.
Breach of Contract Mediation Benefits
Due to the common nature of breaches, contract breach mediation is often preferable to traditional litigation. This is especially true for breaches that fall under the banner of family law, divorce law, and minor business breaches.
Filing a lawsuit against an individual or business is an expensive, time-consuming process. It is also incredibly complicated and stressful. You need to hire an attorney and so does everyone else involved. Your attorney will hire other legal professionals and begin the complex discovery process. This can take weeks, months, or even years. You will be paying your attorneys the entire time. Only then will you enter the courtroom. In family law, this may mean involving young children and arguing about sensitive, emotionally draining issues.
Breach of contract mediation, on the other hand, offers an alternative. It involves one breach of contract mediator who works with all parties to reach an amicable and mutually beneficial outcome. This is accomplished by confidential negotiation. You will sit down with the mediator and other parties to work together towards an agreement. While this isn’t always easy, it is better than contentious courtroom proceedings.
Your breach of contract mediator helps you collaborate with the other parties. They open lines of communication. Due to this open and honest conversation, and the confidentially of breach of contract mediation, the individuals or businesses involved are often more open to compromise.
Shapiro Mediation is Florida and Massachusetts’ premier breach of contract mediation firm. Our expert mediators know what it takes to work with all parties to reach a successful outcome. With offices in Boston and Ft Lauderdale, we are able to offer extensive knowledge of local, state, and national law. Contact us today at (339) 298-7733 to get started.