Whenever a business transaction occurs, a business owner and a customer both agree to the conditions and terms of the sale. Typically, those provisions are outlined in a sales contract that becomes legally binding to both parties. The contract represents the seller’s promise to make good on the offer of sale to the customer, and the customer consents to make payment for the item. Business owners in New Jersey may be interested in learing about the consequences for failing to uphold the terms of a contract.
When either party involved in the contract breaks the terms or conditions of the agreement, that action is called a breach of contract. As defined by the Uniform Commercial Code, if the sale items are not up to the standard outlined in the contract or if the seller fails to make a timely delivery of the sale items, it is a breach of contract caused by the seller. Furthermore, a seller who fails to fulfill other duties outlined in the contract, such any implied or written warranty statements, may also be in breach of the contract. Parties who grossly fail to keep the main terms of the contract are guilty of a material breach.
Typically, the non-breaching party has the right to take legal action in an effort to recover losses that the breach caused. The losses may include incidental damages for injuries a party suffered as a result from the breach or an amount stipulated in the contract to cover a breach.
A New Jersey lawyer may be able to offer guidance to those who are dealing with contract disputes. Besides maintaining proper documentation, that lawyer may also be able to help defend the client in a breach of contract claim or assist with settlement negotiations during arbitration.
Source: Houston Chronicle, “What Can Happen if You Breach a Sales Contract?“, Lee Nichols, December 07, 2014