What are the 4 Main Types of Contract Breach?

A contract is a valid, legal and binding promise struck between two or more parties. If any party involved in a contractual agreement fails to fulfill his obligations under the contract, or perform to their part of the agreement, it is known as a breach of contract.

It is important for small businesses, particularly, to understand breach of contract. No business wants to inadvertently open themselves up to lawsuits due to their own inadvertent breach. And, importantly, every small business knows the importance of each of their own contracts. Knowing what the obligations are for each party, what a breach looks like, and what can be done about them can make a huge difference for smaller operations in a fluctuating economy.

Read on for this article to provide a short discussion on four different types of contract breach. Remember, in contract law more than most legal areas: the details of your own situation matter. The law is one thing, but when you are operating by the details dictated in your own contractual documents, understanding the specific terms of your own agreement can be just as important as understanding the general law. For experienced guidance and help in any of your own small business legal needs, including potential breach of contract issues, contact an experienced small business attorney at the Forsythe Law Firm.

4 Main Types of Contractual Breaches

Every contract is unique, and complex. Each contract might have different ways that they could be breached. However, generally, when a valid contract is breached there is legal recourse that can be pursued.

Four typical contract breach types include:

1. Minor breach: This might also be referred to as a partial breach – a portion of the contract has been broken, but not the whole thing. For a breach to be considered “minor” the infraction must be insignificant enough that all of the contractual parties can still meet the rest of the contract obligations. What is considered “minor” in one instance might be a major breach in another. However, for example’s sake: say that a cookie baker was tasked with providing 100 circle cookies decorated like a sunflower for a wedding. However, the cookies that were delivered were star-shaped cookies decorated like sunflowers. The terms of the contract were not precisely met – however, in this circumstance they seem to have substantially been met. The star shape vs circle shape would likely be seen as nothing more than a minor breach. The customer (bride) still received cookies, decorated as sunflowers, the shape is simply a little off. It would likely be seen as unreasonable for the customer to take the cookie baker to court over this variance. However, the customer could pursue making the company make up for any damages or problems they did incur from this small breach.
2. Material breach: Material breaches are the most serious – it amounts to action (or inaction) in which one party fails to perform their part of the contract. The breach is so significant that the purpose of the agreement is broken, the non-breaching side not receiving the benefit from the agreement. Continuing the cookie analogy above, a material breach in the contract could be the baker not delivering any cookies at all. This would allow the affected party (bride) to pursue legal actions against the baker to be made whole.
3. Anticipatory breach. This occurs when one party knows the other will not fulfill the terms of the contract on time. This allows the non-breaching party to claim breach of contract. In our cookie analogy, this might look like the baker calling the bride a week before her wedding to tell her that the baker took a new job and will be out of the country the week of the wedding – she will not be providing the cookies as ordered by the wedding date. The bride could sue for damages because the job cannot be completed as bargained for.
4. Fundamental breach. Similar to a material breach, a fundamental breach occurs when one party fails to complete their part of the agreement in such a fundamental way that the other party cannot complete their responsibilities under the contract. The non-breaching party can sue for damages. This might look like a bride ordering cookies, but then failing to provide an address for delivery and refusing to communicate. The baker has gone to the expense of making all these cookies, but cannot deliver them.

Contact the Forsythe Law Firm

The damages available in a breach of contract case depend on the type and severity of the breach. An experienced Atlanta business litigation attorney can help you assess your case and provide the legal guidance you need in contract matters. Contact our office today to begin speaking with our team.

Sources:

rockdalenewtoncitizen.com/news/business-owner-ordered-to-pay-in-breach-of-contract-case/article_a9183386-7bb8-4d76-a686-f70ffbdf4bb5.html

footballscoop.com/2025/03/04/report-former-georgia-southern-co-ocs-suing-former-school-fraud-breach-contract