Any good business would know that, in order to keep operations smooth, there will be ample contracts with cooperative parties. A contract is a document that can ensure each party understands their legal obligations when providing goods or services. Without a well-defined contract, businesses may have their reputation damaged, so contracts are often specified with plenty of details.

Even though contracts are legally binding, many parties breach their contracts by not fulfilling their obligations, creating difficulties for businesses. A breached contract can put a damper on a business's obligation to clients and, like above, tarnish its name.

Each contract breach is unique, however, they may have similar classifications. The following are the two kinds of contract breaches you could suffer from:

Minor breach

Simply put, a minor breach happens when a product or service isn't provided by a designated due date. For example, a business makes an order for lumber from another business and it's agreed, written or orally, that it will arrive in a month. If the month rolls into two months without the shipment being made, then the business may have a minor breach on its hands.

Material breach

A material breach, however, happens when a business orders a product or service and is given something entirely different than what was agreed. For instance, a business requests oak wood for the construction of furniture. The shipment arrives on time, but the wood is birch and not oak, as previously requested. Thus, a material breach has occurred.

It's unfortunate when a business is placed in an awkward situation because another party breached its contract. To recover from your damages and losses, you may need to be aware of your legal rights.