What is Breach of Contract?

If you have an employment contract with your employer, any breach of contract could have financial consequences. If you have been fired, breaking your contact, you may be eligible to file a wrongful termination claim resulting from the breach of contract.

If you think that your employer has breached your employment contract, for example, you may be able to claim damages if you can prove that a breach has occurred. Damages are awarded in compensation for the financial and other losses which are a direct result of the breach of contract.

There are different types of breach of contract. You are advised to check your employment contract very carefully before taking legal action against your employer for any breach of contract.

An employment law attorney can help assess your situation and provide legal advice including representing you in any action against your employer.

Types of Contract Breach

There are four different types of breach of contract recognized. These are Minor, Material, Fundamental, and Anticipatory breach of contract. Most breaches of contract fall under the anticipatory breach or an actual breach.

These different contract breaches are explained further below.Breach of Contract

Minor Breach of Contract

A minor breach of contract is when only a part of an employment agreement is breached. Generally, a minor breach does not compromise the whole employment contract to such an extent to make it unusable.

When a breach of contract is regarded as minor, it may not be sufficient to warrant taking legal action unless the part of the agreement that has been breached has significant negative financial effects.

Material Breach of Contract

A material breach of contract is much more serious than a minor breach. It encompasses so much of the agreement that it basically violates the whole contract.

A material breach of contract is sometimes referred to as a total breach of contract. Because it has a serious financial effect on the employee’s income, it can be a good reason for taking legal action and suing the employer for damages.

Fundamental Breach of Contract

A fundamental breach of contract is basically the same as a material or total breach of contract. The manner in which the contract has been breached is very obvious, or egregious.  A fundamental breach of contract allows the non-breaching party to recover damages from the breaching party.

 Anticipatory breach of contract

An anticipatory breach of contract takes place when one of the parties lets the other party know in advance that a breach of contract is to take place or the agreement cannot be sustained.

The notice of a breach of contract could either be oral or written. It allows the non-breaching party to take immediate legal action to recover damages.

Wrongful Termination and Breach of Contract

When your employment contract is “breached” or broken by your employer, you may be able to file a wrongful termination claim. Many employers and employees have an “at-will” employment agreement. This means that you can be fired or quit at any time for a reason that is not illegal. Because you are able to be fired at any time, you can’t claim that there was a breach of contract from your firing.

If you signed a contract and your termination violates that contract, that would be a breach of contract. For example, if you singed a contract that guaranteed 3 years of employment and were fired at 1 year with no reasonable cause, this would be a breach of contact.

Breach of Contract

What to Do If Your Employer Breached Your Contract

You can’t just sue your employer for breach of contract without proof. If you believe that your employer has indeed breached your employment contract, you should check carefully and thoroughly through your contract before making a decision to take legal action.

Some employment contracts may be oral agreements. While any breach of an oral employment contract can mean you can take legal action against your employer, it may be more difficult to obtain evidence of a significant breach than if it is a written agreement.

You will find that an employment law attorney can advise you whether you have good grounds for taking legal action and can help with obtaining vital evidence that proves your case.

The most common form of compensation is called compensatory damages, which is basically compensation for your immediate financial loss.

In some cases, a court may order further damages, for example, for the cost of medical treatment, loss of damaged property and punitive damages which are intended to punish the party that has breached the contract.

Depending on the state you work in, there will be a statute of limitations which determines how long you have to bring a claim against your employer. This maybe anything from 3 to 13 years after the breach has occurred.

Consequences of a Breach of Contract

If your employer has breached a contact with you, then they may suffer from severe damages. Under law, the guilty party may be required to remedy the breach. This can likely be in the form of monetary compensation for the various damages suffered. The damages that you may be rewarded as a consequence of you employer’s breach of contract include:

Breach of Contract

  • Expectation damages: These cover what you were expected to get out the contract, such as wages, bonuses, etc. To receive these damages, you will need to demonstrate that were trying to “mitigate” the damages from the breach of contract. For example, if you were fired, you will need to show that you tried to make up for the lost wages by looking for a new job.
  • Consequential damages: These cover damages that indirectly result from a breach of contract. These damages can be more difficult to determine.

Damages can vary by each claim. 

Speak with an Employment Law Attorney

Help from an employment law attorney can make all the difference when you are considering taking action against your employer for breach of contract.

The attorney can check your employment agreement for evidence of breach of contract, help obtain proof that it has occurred, and represent you skillfully in court.

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