Breach of contract claims are frequently litigated in Florida, as businesses depend on written agreements for transactions and relationships. Whether a dispute arises from missed deadlines, unmet performance standards, or non-payment for services, understanding Florida contract law is vital for safeguarding your business interests.
In this blog, we’ll explore the different types of contract breaches, the importance of contract terms, and the remedies available for breach of contract claims.
1. Material vs. Minor Breaches of Contract
Florida law analyzes the severity of a contract breach when determining the appropriate remedy. Breaches usually fall into two categories: material breaches and minor breaches.
- Material Breach: A material breach is a significant violation of the contract that goes to the heart of the agreement. It is a breach that substantially undermines the purpose of the contract and deprives the non-breaching party of the benefits they reasonably expected. For example, if a supplier fails to deliver critical raw materials that prevent a manufacturer from fulfilling a large order, this could be considered a material breach. In the case of a material breach, the non-breaching party is typically entitled to terminate the contract and seek damages for any losses incurred.
- Minor Breach: A minor breach, also known as a partial breach or immaterial breach, occurs when one party fails to fulfill a small or technical part of the contract but does not undermine the entire agreement. For example, if a contractor completes most of the work on a project but delays the final inspection by a few days, this could be considered a minor breach. In these cases, the non-breaching party is not typically entitled to terminate the contract. Instead, they may choose to seek a remedy that compensates for the delay or incomplete performance.
Understanding whether the breach is material or minor is crucial in determining the next steps in litigation, as well as the appropriate remedies.
2. The Importance of Clear and Specific Contract Terms in Florida
Contract terms are critical. Contracts should clearly define each party’s obligations, performance timelines, and any conditions or contingencies. Florida law permits parties to outline specific remedies for a breach, such as liquidated damages, simplifying the claims process. Liquidated damages are predetermined compensation in case of a breach. They must be clearly defined and agreed upon by the parties and cannot be construed as a penalty.
Vague contract language can lead to disputes over what constitutes a breach. Proving a breach occurred or that the breach was material can be difficult in commercial litigation if the contract needs more clarity. Well-drafted contracts specifying rights, duties, and remedies are crucial for businesses in Florida.
3. Potential Remedies for Breach of Contract Claims
When a breach occurs, the injured party may be entitled to several types of remedies under Florida law. The most common remedies include:
- Compensatory Damages: This is the most common remedy for a breach of contract and is designed to compensate the injured party for the actual loss suffered as a result of the breach. Compensatory damages can include direct financial loss, lost profits, and any additional costs incurred to mitigate the breach.
- Consequential Damages: If the breach caused additional, foreseeable losses beyond the direct contract violation, the injured party may be entitled to consequential damages. These damages cover indirect losses, such as lost business opportunities or reputational damage, that resulted from the breach.
- Specific Performance: In certain cases, the court may order the breaching party to fulfill their contractual obligations as originally agreed, especially in contracts involving unique goods or services. This is more common in cases involving real estate contracts, where monetary damages may not be an adequate remedy.
- Liquidated Damages: If the contract includes a liquidated damages clause, this specifies a set amount that the breaching party must pay in the event of a breach. Liquidated damages are enforceable under Florida law as long as the amount is reasonable and not deemed a penalty.
- Rescission: In some cases, the non-breaching party may seek to rescind the contract altogether, essentially voiding the agreement and returning both parties to their pre-contract positions. This remedy is typically available for material breaches or if there is evidence of fraud or misrepresentation.
4. Taking Action in Florida Commercial Litigation
When faced with a breach of contract, it’s important to act promptly. Florida’s statute of limitations for breach of contract claims is typically five years for written contracts, and the clock starts ticking when the breach occurs. Delaying action can jeopardize your ability to seek compensation or enforce your rights under the contract.
The legal process for pursuing a breach of contract claim in Florida commercial litigation involves presenting evidence of the breach, the damages sustained, and the terms of the contract. It’s essential to work with experienced legal counsel who understands Florida’s commercial laws and can help you navigate the complexities of the litigation process.
Contact us for help
At Woolsey Morcom, we have extensive experience representing businesses in breach of contract claims and other commercial disputes. Our team of skilled attorneys understands the nuances of Florida’s contract laws and is committed to protecting your business interests. Whether you’re dealing with a material breach, seeking to enforce a contract, or trying to resolve a dispute, we can guide you through the legal process and help you achieve a favorable outcome.
If you face a breach of contract or need assistance with commercial litigation in Florida, contact Woolsey Morcom today to discuss your case. Let us put our legal skills and experience to work for you.
