Breach of Contract

Common pitfalls

• 1.Terminating for a minor breach when the contract required a material breach — exposes the terminating party to wrongful-termination claims.
• 2.Skipping the cure period — most contracts require written notice and a window to fix the breach before termination is valid.
• 3.Ignoring liquidated-damages clauses — the clause may cap or quantify damages regardless of actual loss.
• 4.Missing the limitation-of-liability cap — many contracts cap recoverable damages at fees paid or a multiple.
• 5.Waiving the breach by continuing to accept performance — silence often counts as acceptance and can forfeit the right to terminate.

Frequently asked questions

What is the difference between material and minor breach?

A material breach is substantial enough that it defeats the purpose of the contract — late delivery of a critical component, non-payment of a significant invoice. Minor breaches entitle the injured party to damages but not termination. The distinction is the difference between walking away and being stuck continuing while seeking compensation.

What damages can I recover for a breach?

Direct damages (the losses that naturally flow from the breach) are usually recoverable. Consequential damages (lost profits, business interruption) are often excluded by contract. Punitive damages are rare in commercial contract disputes. The specific recovery depends entirely on the contract's limitation-of-liability clause.

Do I have to give notice before terminating?

Almost always, yes. Well-drafted contracts specify a written-notice requirement plus a cure period (typically 15 or 30 days) before termination becomes effective. Skipping notice often means the termination itself is invalid — you remain bound to perform while the counterparty sues you for wrongful termination.