As experienced New York commercial litigation lawyers, we often see how contract disputes can impact businesses of all sizes. Whether you're a startup founder in Rochester or running an established corporation in Nassau County, understanding breach of contract is crucial for protecting your business interests.

Today, we're going to break down everything you need to know about contract breaches and your legal options under New York law.

What Constitutes a Breach of Contract?

A breach of contract is the failure to perform contractual obligations without legal justification. As commercial lawyers practicing in New York, we've seen breaches range from minor delivery delays to major financial defaults. Think of a contract like a promise backed by law – when someone breaks that promise, they may be legally responsible for the consequences.

For instance, you are a software firm that hired a developer to design a custom application on or before a specific deadline. In case they do not produce the work done as promised on time or bring to you something substantially different from what was agreed, it could be considered a breach of contract.

Categories of Contract Breaches

Contract breaches are not equal in every way. New York law generally recognizes the following:

Material Breach: A material breach goes to the heart of the contract, thus essentially defeating its purpose. Let's say you ordered 1,000 specialized computer chips for your technology business and received completely different components. That would probably qualify as a material breach since it goes to the heart of the contract's purpose.

Minor Breach: Also called a partial breach, this happens when the primary purpose of the contract is still served, but some minor details are not fulfilled. For example, if those computer chips arrived one day late but were otherwise exactly as specified, this may be a minor breach.

Anticipatory Breach: This is when one party manifests clearly to the other that it would not perform its obligations prior to the date set for the performance. If your supplier advises you two weeks prior to the delivery date that it cannot deliver the ordered materials at all, then this may be an anticipatory breach.

Common Causes of Contract Breaches in New York

As New York commercial litigation attorneys, we regularly encounter these common scenarios:

1. Payment Defaults. Late payments, missed payments, or disputes over payment terms represent a significant portion of contract breaches. This is especially common in construction and service industry contracts.
2. Performance Issues. When services or goods don't meet the specified quality standards or scope of work, it can lead to breach claims. This often occurs in professional service agreements and manufacturing contracts.
3. Timeline Failures. Missing deadlines or failing to meet project milestones can constitute a breach, particularly in time-sensitive industries like technology and construction.
4. Communication Breakdowns. Sometimes, breaches occur due to misunderstandings about contract terms or poor communication between parties.

Legal Remedies for Breach of Contract

When a breach occurs, New York law provides several potential remedies:

Monetary Damages. The most common remedy, monetary damages aim to put the non-breaching party in the position they would have been in had the contract been fulfilled. This might include:

• Direct damages (immediate losses)

• Consequential damages (indirect losses)

• Lost profits

• Incidental damages (costs incurred dealing with the breach)

• Specific Performance

Specific Performance. A court may grant a specific performance order against a breaching party in instances involving unique goods or services. It is less often applied but can be extremely useful in real estate and for the sale of very rare items.

Rescission. Rescission nullifies the contract and re-establishes the parties at their pre-contract statuses. This remedy is especially applied where one party had entered into the contract relying on misrepresentations.

The statute of limitations for breach of contract is six years for written contracts, and four years for any contract involving the sale of goods under the Uniform Commercial Code. But a contract can provide for shorter time periods to bring claims; therefore, be sure to study your agreements closely.

Protect Your Business Interests With Commercial Litigation Lawyers

If you believe a contract has been breached, timely action is of utmost importance. An experienced commercial lawyer often prevents disputes from becoming heated and protects your legal rights. Some red flags where you should seek legal assistance include:

• Late payments or missed deadlines for delivery
• Poor quality of goods or services
• Communication breakdowns with parties to the contract
• Interpretational disputes over the contract
• Legal actions threatened

At Horn Wright, LLP, our New York contract attorneys are aware of the intricacies of business contracts and the need to protect your interests. Whether you are facing a potential breach of contract or want to ensure that your agreements are properly structured to prevent future issues, we are here to help.

Do not wait until a contract dispute turns into a crisis. Contact us today for a consultation with our commercial lawyers.