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How do breaches of contract and warranty differ?

On Behalf of | Jul 7, 2021 | Construction Law |

As a contractor, you likely hope that no disputes between you and your customers will ever arise. There are many factors at play any time someone enters into a contract with someone else. Things can go wrong. 

One of the most common disputes that arise is over breaches. There can be breaches of warranties and contracts. You may find it helpful to understand the difference between the two — and what that means for you when it happens.

What are contract and warranty breaches?

Contracts contain terms and conditions that each party must meet. Any instance in which they fail to do so may constitute a breach of a contract.  

A warranty contract is an agreement in which a seller assures a buyer that their product or workmanship will last for a specified period of time. There can also be a warranty on intellectual property rights and the ownership of shares in a particular company.

Who determines what happens if a breach of contract or warranty occurs?

The Uniform Commercial Code dictates what compensation a plaintiff can recover if a breach of warranty occurs. Plaintiffs can only seek damages associated with the lack of performance when a breach of warranty occurs. Awards in breach of warranty disputes are based on the breach of the warranty and not the validity of the contract. 

Plaintiffs can seek enforcement for specific performance or sue for a termination of their contract when a breach occurs. A plaintiff may be entitled to recoup the value of the entire contract when services or items aren’t delivered or performed.

Why is it important that you know if a breach of contract or warranty occurred?

Whether a breach of contract or warranty occurred dictates how much in damages a plaintiff may request. You do have a right to put up a defense in your case, though. Your ability to deny liability may limit how much you have to pay if a judge or jury rules against you. Please continue to review the resources here on our website to understand more about contract law and your rights in such cases. 

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