Contracts typically make transactions straightforward and predictable. However, some individuals complicate matters by breaking their promises. A party that breaches a contract could be liable for financial damages or other remedies.
Below, we outline five breach of contract examples and what relief might be available for the wronged party. At Massingill, our highly experienced contract attorneys can guide and protect anyone through a breach of contract dispute. We simplify contract matters for our clients while providing the highest advocacy and guidance.
Examples of Breach of Contract
Whether someone has breached an agreement’s terms depends on the case’s unique details. The following are ways that someone might encounter a breach of contract.
Actual Breach
A breach of contract occurs whenever a party to a contract fails to comply with the bargained-for terms of their agreement. By slightly changing the following facts, a contracting party’s “less-than-ideal” behavior can transform from an annoyance into a breach that makes them legally liable.
Example #1
A restaurant signs a written agreement for the fabrication and delivery of custom napkin rings from a supplier by a specific date. After signing the agreement, the restaurant owner asks the supplier to make the delivery in the back alley, and the supplier says, OK—the terms of this exchange are not in the signed agreement. The supplier delivers the napkin rings early, but they make the delivery out front because a truck is blocking the alleyway.
The failure to deliver in the back is likely not a breach because the parties reduced their agreement to writing, and the discussion about the delivery location was not in writing. However, if there was a written term in the agreement stating the supplier had to make their delivery in the back alley, the restaurant might have a breach of contract claim. If the supplier can prove that the front door delivery caused them a loss (e.g., the delivery blocked customers from entering to purchase meals), they could receive financial damages.
Minor Breach of Contract
Parties can fix minor contract breaches with a small discount, a small fee, or a simple “I’m sorry.” They could sue each other over a minor breach, but the relief might not be worth the cost of a court case.
Example #2
A parent hires a photographer to take winter family portraits. The photographer agrees to a half-day outdoor shoot in exchange for $1,000. The contract states that the photographer’s shoot will start at 1:00 AM, end at 5:00 PM and that the photographer will not shoot after sundown. The photographer arrives at the photoshoot 30 minutes late. While the photographer takes many beautiful shots of the family, they must stop taking pictures at 5:00 PM because the sun has gone down.
The photographer committed a breach because the parent did not get the full four-hour day they bargained for. However, a court might see this breach as only minor because the parent still got close to four hours of photography and plenty of portrait-worthy pictures. The photographer could agree to a $125-dollar discount for their services to resolve this issue.
Non-Material Breach
In general, a non-material breach is similar to a minor breach but with more significant damages. A common way a non-material breach can arise is in a construction case.
Example #3
A homeowner hires a contractor to complete a home renovation by a deadline. The three-phase renovation will make the home unlivable until the third phase. During the contract negotiations, the homeowner tells the contractor they will have to pay $500 per week for a place to live during the construction.
The contractor completed phase two of the renovation six weeks late, leaving the homeowner to pay $3,000 more than expected on living expenses. The contractor then finished phase three of the renovation, and some of the light fixtures they installed immediately ceased to work. The homeowner can likely sue to recover the extra $3,000 they paid on living expenses and the cost of repairing the light fixtures.
Material Breach
A material breach might occur if a contracting party does not get what they bargained for. A court may identify a material by looking at the following factors:
- The extent to which the non-breaching party would be deprived of the contract benefit they reasonably expected,
- The extent to which the non-breaching party can be adequately compensated for the benefit they would lose,
- The extent to which the breaching party would suffer if the contract is forfeited,
- The likelihood that the breaching party will fix their breach, and
- The extent to which the breaching party acted in line with the standards of good faith and fair dealing.
In a material breach case, the hurt party can receive damages for their losses and a court order stating they do not have to perform their contract obligations.
Example #4
Melissa hires a florist to provide custom flower arrangements for her wedding ceremony at the church. After the ceremony, the guests will visit the nearby botanical gardens for an outdoor reception. The cost of the flowers is $5,000, including a $500 deposit Melissa paid when she hired the florist.
The florist doesn’t arrive until more than halfway through Melissa’s ceremony and cannot set up flowers in the sanctuary. The florist offered to set up the flowers at the reception, but Melissa declined because there were already flowers at the reception site.
Melissa refuses to pay any money for the florist’s custom arrangements and requests a refund of her deposit. The florist likely committed a material breach since Melissa bargained for custom flowers at the church and did not receive them. A court might hold that Melissa does not have to pay the remaining $4,500 and that the florist must refund her deposit.
Anticipatory Breach
A party commits an anticipatory breach of contract if it unconditionally refuses to perform its side of the contract. The party harmed by an anticipatory breach can receive a court order stating that it doesn’t have to fulfill its side of the contract.
Example #5
A shoe company contracts with a manufacturer for an overseas shipment of shoelaces. The parties set a specific price and timeline for the shipment. However, an unexpected spike in fuel prices increases the manufacturer’s shipping costs. The manufacturer contacts the company and demands an additional 15% for the shipment. The company refuses to pay more than the contract price, and the manufacturer refuses to ship the goods.
The company finds a local supplier to provide shoelaces. After the timeline passes, the original manufacturer completes the shipment and unsuccessfully tries to sell the shoelaces to the company for the original price. The manufacturer files a lawsuit against the company. The court might hold that the company does not have to pay the original manufacturer because the manufacturer committed an anticipatory breach.
An individual seeking strong counsel in any type of breach of contract case can speak to one of our skilled and knowledgeable attorneys.
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Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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