Sometimes, when a person makes a deal, circumstances change, and it is not possible to follow through. Owners of California businesses may wonder what happens in that situation. A contract for the sale of goods is legally binding and enforceable in court.
Any action that goes against the agreement made by the parties constitutes a breach of contract. If a person’s action breaks the promise made in the contract in such a way that the contract cannot be repaired, that is considered a material breach. Common examples of breach of a sales contract would be failure to deliver the goods in a timely manner or failure to pay for goods as promised. A breach could also occur if a person failed to honor a given warranty.
Damages for breach of contract typically involve the amount of money that the non-breaching party lost because of the other party’s failure to perform. For example, a customer that contracts to buy an item and winds up having to purchase it elsewhere is entitled to any price difference in addition to a refund of monies paid. If the individual suffered an injury because of the broken promise, there may also be consequential damages involved. Punitive damages are not common in breach of contracts cases, but they are possible.
When a company is sued for breach of contract, a business and commercial lawyer may be able to assist in reviewing the complaint and drafting a response. It may be possible for a lawyer to assert any applicable defenses or counterclaims. It may also be possible for a lawyer to help negotiate a settlement to avoid going to trial.
Source: Houston Chronicle, “What Can Happen if You Breach a Sales Contract?“, Lee Nichols, December 08, 2014