According to Google, a contract is a written or spoken agreement, especially one concerning employment,

sales, or tenancy, that is intended to be enforceable by law.

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http://www.lawhandbook.org.au/07_01_01_what_is_a_contract/

A contract is a legally binding or valid agreement between two parties. The law will consider a contract to
be valid if the agreement contains all of the following elements:

1. offer and acceptance;

2. an intention between the parties to create binding relations;
3. consideration to be paid for the promise made;
4. legal capacity of the parties to act;
5. genuine consent of the parties; and
6. legality of the agreement.

An agreement that lacks one or more of the elements listed above is not a valid contract.

Must contracts be in writing?

Not all contracts need to be in writing. Contracts that are required by law to be in writing include
contracts to buy and sell land or to buy a motor car and door-to-door sales contracts. However, it is
always useful to have the terms agreed between the parties written down and attached to or kept with any
other relevant papers; for example, copies of quotations, brochures, pamphlets, etc. that were supplied at
the time the contract was entered into. Receipts for money paid should always be kept. If a dispute arises,
these documents will assist in resolving differences between the parties.

A written contract can be drawn up by listing all the terms agreed between the parties and getting each of
the parties to sign and date the document at the end.

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https://www.legalmatch.com/law-library/article/breach-of-contract.html

What Is a Breach of Contract?

A contract is a legally enforceable agreement between two parties. Each party to a contract promises to
perform a certain duty or pay a specified amount.

A breach of contract means one party to the contract fails to fulfill her contractual obligations. A breach
can occur if a party fails to perform within the time frame specified in the contract, does not perform in
accordance with the terms of the agreement, or fails to perform whatsoever. If one party fails to perform
while the other party fulfills her duties under the contract, the performing party is entitled to legal
remedies for breach of contract.
 Types of Breaches
There are four different types of breaches of contract:

Actual Breach v. Anticipatory Breach

Most breaches of contracts is one of two types: actual or anticipatory. Actual breaches occur when a party
fails to fulfill her obligations on the date performance is due, or when a party performs her obligations
and the other party refuses to perform.

Anticipatory breach occurs when a party refuses to perform her obligations under the contract before the
due date of performance. For example, if a party agrees to sell her car to a buyer in five days, but then
reneges on day three, she is anticipatorily breaching the contract.

Minor Breach v. Material Breach

A contract breach can either be minor or material. A minor breach, also known as a partial breach, is a
failure to complete a minor, non-essential part of a contract. Although it is technically a breach, the
contract can still be completed.

A material breach, on the other hand, is a substantial breach in contract terms usually excusing the non-
breaching party from performing and giving her the right to sue for damages. For example, in a home
purchase contract, a seller refusing to give the buyer the keys to the home after the buyer has completed
all contract terms is a material breach.

Oral v. Written Contracts

Generally, both written and oral contracts are legally enforceable; notwithstanding, it is best to
memorialize your contract in writing in case theres a dispute about the terms of the agreement.
Moreover, there are certain contracts that must be in writing to be enforceable, including:

Contracts involving the sale or transfer of land;

Promises to pay someones debt obligations;
Contracts that cannot be completed within one year of its making;
Contracts involving the sale of goods for more than $500; and,
Contracts that will go beyond the lifetime of the one performing the contract.

Remedies for Broken Contracts

There are several remedies for breach of contract:

Compensatory Damages: The most common legal remedy, compensatory damages are a monetary
award to compensate the aggrieved party. A court can order the person who breached the contract to pay
the aggrieved party enough money to get what they were promised by the terms of the contract.
Restitution: A court orders restitution if they order the breaching party to pay back the other person the
amount the aggrieved party paid initially to make the aggrieved party whole again.
Punitive Damages: If the breach of contract is especially heinous, a court may order punitive damages,
meant to punish the breaching party for breaking the terms of the contract.
Specific Performance: A court can force the breaching party to perform the service or deliver the goods
that were promised in a contract.
Why Should I Consult with an Attorney?
Contract law can be complicated, and every state has different lawsuit filing procedures and deadlines for
breach of contract claims. Speaking with a knowledgeable contract attorney can help determine what
remedies are available to you. The above remedies can be attained by working with a knowledgeable
contract attorney.

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https://www.rocketlawyer.com/article/breach-of-contract-what-happens-now.rl

What is a breach of contract?

Consider the term 'breach' synonymous with break, just like the broken word mentioned in the above
scenario. Breach of contract can be defined as a broken contract, stemming from failure to fulfill any term
of a contract without a justifiable, lawful excuse. A breach of contract might occur when a coworker
refuses to complete her portion of a job; when an employee does something prohibited by his job
contract; or even when a customer prevents the contractor from satisfying the obligation or finishing the
project at hand.

How does a breach of contract impact a small business?

Contract breaches are obviously bad news for small businesses and individuals. They can waste both
money and time, and certainly lead to frustration for everyone involved.

At the same time, it's important to note that not all breaches are created equal. In most cases, if you want
to move forward with a breach of contract suit, it needs to meet the criteria set by the following four
breaches:

A material breach-failure to perform one's duties as set in the contract-is considered one of the
most serious, and allows the injured business or individual to seek damages in court. The broke
contractor mentioned above might be able to collect in court because his client failed to perform
his end of the deal. The contractor was supposed to collect his pay when he finished the job. He
did his part, but the client didn't follow through with his end of the deal.
Fundamental breaches also often end up in court, as this kind of violation allows the aggrieved
individual to stop performance of the contract and sue for damages. For example, if you signed a
lease for a new apartment, but showed up on moving day only to find someone else living there,
your landlord is in fundamental breach of the lease contract. You could sue for damages and to
make him rent the apartment to you under the original agreement.
An anticipatory breach allows one person to say the contract is broken when it becomes evident
the other party will not execute his or her end of the contract within the allotted time. Let's say
your neighbor hires you to paint her house, for example, and she'd liked the job completed by
October 1. If you haven't started by September 30, she could try to collect monetary damage
because there's no way you could get the job done in time.
A minor breach is a partial breach. For instance, let's say you hire a friend to build a website for
your business. He gets the site done in time, but there are a few errors. While you can't sue for
 actual performance (he finished the job after all), you might have the option to sue for monetary
damages or force him to make corrections.

Regardless of the type of contract breach, you need to establish a few facts to build a credible case should
you take the breach to court, and this can get tricky-especially if the contract was verbal or implied. In
most breach of contract cases, you must verify that:

The contract existed.

The contract was broken.
You lost money.
The defendant (person or business you're challenging) was responsible.

Where there is a right, there is a remedy

No matter what kind of contract breach you've experienced, you need to be aware of what types of
remedies are available to you. In many cases, you might just seek money to make up for what was lost
from the broken contract. Common monetary remedies and damages in breach of contract cases might
include:

Compensatory damages pay money to reimburse costs and compensate for losses.
Consequential and incidental damages are generally awarded if everyone involved was aware of
potential losses in case of a breach when the contract was signed or accepted.
Liquidated damages are agreed damages specified in the contract.
Punitive damages, or money given as retribution, are for offensive behavior or actions from the
defendant (rare in breach of contract cases).
Attorney's fees are recoverable as damages in contract cases when expressly included in the contract
or authorized by statute.

Sometimes there's more than money involved in breaches of contract. These cases also have common
remedies, which include:

Specific performance, a court order for each person or business to follow through with the initial
agreement
Rescission, which is when the contract is canceled, any money returned, and the matter dropped as if
it never happened
Reformation, achieved when the contract is re-written to better suit the actual intention of the
contract-essentially a 'do-over'

The options for remedies are often included in the contract itself. Before considering legal action in a
breach of contract case, it might be wise to carefully review the initial contractual agreement and look for
any limitations or requirements to avoid unintentionally waiving contract remedies.
Breach of contract disputes are likely among the most common legal suits in today's courts because they
can potentially impact any aspect of any small business. No matter whether you're dealing with contract
fraud, nonpayment claims or even failure to comply with a non-disclosure agreement, it doesn't have to be
an uphill battle. Knowing your rights, options and legal remedies can make dealing with breaches of
contracts a little less painful. And remember: it's hard to get what you deserve if you don't create a
quality business contract in the first place.

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https://www.legalmatch.com/law-library/article/breach-of-contract-penalties.html

How Can a Contract Be Breached?

A contract can be breached in a number of ways and the breach may be minor or material. A partial
breach occurs when it is minimal such as missing a small payment or delivering 99 items when a contract
was for 100 items. A material breach occurs when multiple payments are missed or for example only 5
items are delivered when a contract required 100 items. However, there are many times where it is
unclear whether a breach was partial or material, which makes a substantial difference in the amount
of contract damages.

What Happens When Someone Breaches a Contract?

When a contract is breached there are several potential ways a court may award the breached party. The
general rule in contracts is that a party will get their expectancy damages. This means the breached party
will get what they expected to receive from the contract. For example if an employee was supposed to
receive a $5,000 paycheck every month and his employer breached by not paying one month his
expectancy damages would be $5,000 and that is likely what a court would award to the breached party.

However, there are times when the expectancy cannot be determined adequately, such as lost profits for a
business that never started. In that scenario a court will likely award the breached party the amount of
money they spent to start the business.

There is also a remedy known as unjust enrichment which occurs when one party benefits unjustly from
someone else. An example would be paying someone $1,000 to build a house and then they never build
the house. In that scenario the builder received $1,000 unjustly and could be required to return the $1,000
they received.

Are There Penalties in Contracts?

The answer is generally no. Courts generally look down on penalties in contracts because they do not
want to punish people for entering into deals or breaching them if it makes financial sense. Even if there
is a liquidated damages provision in the contract, the court will not enforce it against the breaching party
if it amounts to an unreasonable penalty.

Therefore, even if the other party behaves horribly there is generally no penalty or punitive damages in
contracts. It may be possible to get punitive damages if the contract was based on fraud, but this is
unusual and rarely imposed by the courts.

Do I Need a Lawyer to Avoid Contract Penalties?

If a contract has been breached the remedy the court decides to utilize can make a significant difference in
the amount paid. If a contract was fraudulently entered into you may get punitive damages instead of
mere expectancy but this is very rare. Therefore, if you are in a breach of contract situation it would be
wise to contact an attorney to ensure you are getting the best legal remedy available.