As a business owner, agreements can make or break you. Coming to terms for things like leases, inventory and equipment require parties to enter into a legally binding document to specify the conditions and terms of the agreement.

If one party does not fulfill the duties as agreed, the other may have the right to seek remedies. If you find yourself dealing with an entity failing to perform according to the contract, you may have cause to pursue legal avenues.

Breach of contract

A breach of contract is a break in the terms of the agreement. The contractor who does not follow the agreement and fails to rectify the situation is in default. A breach can occur in one of the following three ways:

  • Partial: A party defaults in one area, but still completes other elements.
  • Material: The party’s breach does not allow the other contractor to fulfill terms.
  • Anticipatory: One contractor believes the other party will not keep its end of the deal.

Standards of proof of breach

In Arizona, the law requires that the party hurt by the violation must prove the break occurred to recover under the remedies. There are four elements the slighted party must establish for the court to rule the breach exists.

The first prong of the test is that evidence must exist that a legally binding contract exists. Second, the party claiming the other is in breach must prove it did everything it could to uphold its end of the contract. The third element is the converse; that the party in breach did not fulfill its obligations according to the details of the agreement. The final step is proving the party alleging a violation must show evidence it sustained a loss because of the failure to perform.

An entity who commits a breach is likely to continue doing so until something stops it. This may require legal action and the help of an attorney.