A lot of work goes into creating a contract between businesses. Typically, it starts with a boilerplate agreement that your attorney refines to include the specific details you need for the arrangement. The person you’re entering into a contract with will also have details they want included.
After both sides agree, the contract is signed. All that remains is to carry out the terms of the contract.
Hopefully, there won’t be any issues, and both sides will fulfill their obligations.
What happens if that contract is breached? That is when it’s time to reach out to an experienced Gulfport litigation and appeals lawyer. This doesn’t have to be the same attorney who initially drew up your contract. It just has to be someone who understands Mississippi contract law and will protect your interests.
Understanding What a Breach of Contract Looks Like
Simply put, a breach of contract happens when one party fails to fulfill their obligations set forth in an enforceable agreement. According to Mississippi contract law, generally a breach of contract requires the following elements:
- A valid contract exists that is either written or oral.
- The plaintiff performed their contract obligations.
- The defendant failed to perform their contract obligations.
- The plaintiff suffered damages as a result.
As you might imagine, a written contract is much easier to enforce, but Mississippi courts do allow certain oral contracts. However, Mississippi’s statute of frauds requires certain agreements to be in writing. Mississippi’s version uses an annual 15-month threshold rather than the one-year rule most states apply.
These are the types of breaches recognized in Mississippi:
Material Breach
This is a significant failure that can be directly attributed to a clause in the contract. If you are the non-breaching party, you can sue for damages or terminate the contract.
Minor Breach
This is a less serious failure that may still warrant damages.
Anticipatory Breach
If the party you signed a contract with communicates in advance that they won’t fulfill their obligations, you’re entitled to sue immediately.
No matter what type of contract breach you’re experiencing, it is not something you should try to resolve directly. Getting your attorney involved will help secure your interests and put the other party on official notice that they must respond.
The Immediate Aftermath of a Breach of Contract Judgment
If the contract breach you’re experiencing can’t be resolved with negotiation, it will move to a lawsuit and be resolved in court. The judge will conduct a thorough review of the contract and hear from both parties. Their final ruling can involve the following options:
- Post-Judgment Interest: If there is an unpaid balance, interest starts accruing immediately at statutory or contract-specified rates. That could be part of the settlement.
- The Grace Period: Debtors are typically given a short informal or formal window to satisfy the judgment voluntarily. By doing so, they can avoid aggressive collection actions. The grace period is often 10 to 30 days.
- Appellate Options: The losing party can file a motion for a new trial, a motion to amend, or file a notice of appeal within strict state or federal deadlines.
- Writ of Execution: If payment is not made, you can ask the court for a writ of execution. This would allow you to seize bank accounts, garnish wages, or liquidate commercial and personal assets to satisfy the judgment.
- Information Subpoenas: The judge can legally compel the debtor to disclose their asset locations. That means turning over bank details and financial ledgers all under oath.
- Liens on Property: The judge can also place automatic liens on the debtor’s real estate holdings or business equipment as long as they are on the county Judgment Roll. If the debtor owns property elsewhere in Mississippi, the judgment has to be enrolled in each county separately.
Understanding the Types of Remedies Awarded by the Court
The judge in a breach of contract lawsuit could allow for the following remedies:
- Compensatory damages: These would cover your direct financial losses. In other words, it would be what you were due had the contract been performed.
- Consequential damages: There might be foreseeable losses tied to the specific breach that can be compensated.
- Liquidated damages: A thorough contract will include pre-agreed sums for specific violations.
- Punitive damages: These are seldom awarded in breach of contract lawsuits but can be issued to punish egregious, fraudulent, or bad-faith behavior.
- Nominal damages: Small token amounts given when a technical breach occurs without proven financial loss.
In addition to the monetary damages, the court can order the breaching party to finish their contractual duties. They could also issue a rescission order that will void or cancel the contract. That will return both sides to their pre-contract positions.
Additionally, a court-ordered restitution restores money to the injured party that the breaching party unfairly received.
Why Legal Representation Matters In Breach of Contract Dispute
An experienced attorney should always review a business contract. You’ll also need that attorney to help when there is a breach of the contract. Your attorney will provide you with an unbiased assessment of your claim strengths, weaknesses, and the realistic financial outcomes.
The attorneys at Owen, Owen & Smith, PLLC, have prepared hundreds of contracts for a wide range of Mississippi businesses. We also apply our experience to help resolve breaches.
That can start with demand letters that put the other party on notice that they are in breach and need to resolve it. If this matter can’t be resolved through negotiations, we’ll be fully prepared to represent you in court. When you have a strong contract, the breach should be evident, and we’ll always work towards a fast and fair resolution.
If you’re experiencing a contract issue, reach out to our offices to schedule a consultation.
The sooner we can review the contract, the sooner we can suggest the next steps.
