All business owners enter contracts with the idea that both sides will benefit. You have done your research, negotiated in good faith and you expect the other side to live up to the deal. And, in a perfect world, that is exactly what happens every time.
Unfortunately, we do not live in a perfect world, and contract disputes do happen, even between Collin County businesses.
Breach of contract
The most common contractual dispute is a breach of contract. This is where one or both parties to the contract argue that the other side has not complied with their contractual obligations.
When this happens, the party not complying with the contract is said to have breached the contract.
Types of breaches
Any failure to deliver or comply with the contract can qualify as a breach of contract. Though, to find the appropriate solution (called a remedy under the law), courts will look at the type of breach.
A breach can be either an immaterial breach or a material breach, and whether the breach qualifies as either depends on the facts of the case and the language specified in the contract.
As the name implies, a minor breach where no damages have occurred, is an immaterial breach.
That immaterial breach can rise to material once you incur damages and if it is made material in the contract.
However, the breach does not actually need to have occurred yet, if it is clear from the non-complying party that they will breach. For example, if your vendor tells you in an email that it will not deliver the goods you paid for, then this material breach has already occurred, even if the shipping deadline has not occurred.
At that moment, you can sue your vendor for a breach of contract.
Can I sue?
In the United States, anyone can sue for any reasons (within reason). However, for business owners, when deciding whether to sue you factor in your time, business resources needed to sue and the costs associated with suing (loss, attorneys’ fees, etc.). Your first question should never be, “Can I sue?” It should be “Should I sue?”