Fundamental Breaches of Contract in Iowa
Fundamental breaches, also known as “actual” breaches, encapsulate situations where one party fails to honor the terms of a legal agreement. This applies to situations where an offending party refuses to complete deliverables or does so improperly.
In a fundamental breach, the injured party has the right to terminate the contractual relationship outright. They also have the ability to sue the offending party for their failure to live up to a contract’s terms.
In filing a lawsuit against the offending party, a business that has suffered a fundamental breach has the right to seek monetary relief for both compensatory damages and consequential losses. Compensatory damages include any direct negative financial impact that resulted from the failure to deliver. Consequential losses are indirect, theoretical losses that exist outside the scope of the contract but are nevertheless suffered by the injured party due to the breach. This might include lost opportunity cost due to a failed expansion of operations, for example.
Our West Des Moines contract dispute attorneys can work with your business to understand its litigation options when it has suffered a fundamental breach. We can evaluate the facts of the situation, including the future impacts to your company, and pursue the maximum amount of damages possible.
Anticipatory Breaches of Contract in Iowa
There are situations where it can become clear a party involved in a contractual relationship does not intend to deliver on its obligations before they are technically in breach. These instances, called anticipatory breaches, can still result in liability for the offending party.
Injured parties can sue an offending party for anticipated damages. They also can move to terminate the contractual relationship, even if a fundamental or material breach has not yet occurred.
Types of evidence that can support an anticipatory breach include:
- Rejection of payment installments. Your contract will likely include a payment schedule that is consistent with delivery phases throughout the project. If a party refuses to accept payments at points defined by the contract, it may be because they know they will be unable to complete the project as agreed and are avoiding accepting money that they know they have not earned.
- Failure to appear at worksite or lack of observable progress. If the project involves a physical worksite or some other form of physical or observable labor, extended absences of contracted workers may point to larger problems.
- Failure to meet deliverable schedule. Many larger projects will meter out deliverables over a schedule agreed to by both parties. While schedules can be modified and deadlines shifted when unexpected obstacles arise, a failure to communicate combined with a failure to deliver often points to an anticipatory breach.
- Explicit notice of anticipated failure to meet obligations. In some cases, a party may foresee its failure to meet deliverables due to some unanticipated difficulty and choose to directly inform the other party of an anticipated breach.
When it becomes clear that a contracted party does not intend to deliver the work they were contracted for, it is in your business’s best interest to promptly hold them accountable. Acting quickly will be essential to efficiently recover damages so that your business can mitigate its losses. Our team can assess the available evidence and advise on whether you have a case to pursue an anticipated breach of contract lawsuit.
Schedule a Consultation Today
No one wants to deal with a contractual dispute. Ideally, every party would fulfill their obligations, but you must be prepared to defend yourself in the event of an anticipated, material, or fundamental breach. Our West Des Moines contract dispute lawyers at Pearson Bollman Law can give your business the legal support it needs to navigate these conflicts as efficiently and effectively as possible. When you meet with our team, we will review the complete facts or your case as well as listen to your concerns and goals. We will work with you to strategize on how best to build and approach your case and will leave no stone unturned in fighting for the favorable outcome you deserve.