Sjoberg & Tebelius, P.A.
Serving Minnesota & Western Wisconsin

Minnesota Business Owners: What to Know about Contract Breaches

StockSnap_SEVPWIOFCM (1).jpgContracts are the backbone of successful businesses. They set rules, expectations, and penalties; they define relationships and allow parties to work confidently in the pursuit of shared goals. 

If a party is accused of breaching a contract, then there can be considerable consequences for both sides personally, professionally, and financially. Because of all that is at stake in these situations, it is vital for business owners to know what options they have in the event of an alleged breach of contract.

Not all breaches are the same

First, understand that not all breaches are actionable. A breach must be material -- or so significant that it defeats the purpose of the contract. In other words, a minor oversight or action that does not affect the agreement would likely not be grounds for legal action.

It is also critical to note that sometimes there is no actual breach of contract. In some cases, the contract may not be valid to begin with, so the alleged breach is not a breach because the contract is not a contract. This is why it is so important for parties to have legal guidance throughout the life of their contract.

Options for remedying a breach

Should someone breach a contract, there are numerous options for remedying the situation. These options depend on the nature of the breach and the effect it has on the contract.

It may be possible for parties to resolve the situation themselves amicably and without legal intervention. If this is not possible, the non-breaching party might seek the following legal remedies.

  • Payment of damages to restore the non-breaching party's financial position and/or penalize the breaching party for wrongful acts. 
  • Specific performance of the duties stated in the contract.
  • Cancellation of the contract.

There can be a lot at stake when a party breaches a contract, from money and the success of a business, to the completion of a product and delivery of services. Because of this, it is crucial not to minimize the importance of contractual agreements or alleged breaches.

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Sjoberg & Tebelius, P.A.

2145 Woodlane Drive
Suite 101
Woodbury, MN 55125

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Phone: 651-315-8856
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