Business Contracts: When there is a Breach

Business Contracts: When there is a Breach

Business Contracts: When there is a Breach

Contracts govern nearly every aspect of your small business every day. You are likely to have numerous contracts with other businesses, vendors, contractors, customers, employees, and individuals. A breach of contract, which can be particularly damaging to a small business owner, is common in business. Breaches are typically followed by a host of problems and wasted resources, ending many business relationships. Whether you are a startup business, a well-established business, or need a specialty agreement, a small business attorney will ensure that you are protected before or after a breach has occurred. This post will discuss what constitutes a breach, how it affects your business, and what you can do about it.

When Is It a Breach of Contract?

Contracts can be quite complicated, and what seems like a breach may really be a misunderstanding. One of the most common errors made in contracts is not recognizing breaches or having a process in place for dealing with them. Delays and other unexpected events happen all the time, and breaches can occur when a party fails to perform or pay on time, a product is not delivered as specified, or someone does not uphold the terms of an agreement.

Your small business attorney can help you determine if a breach has occurred and what recourse you have.

Four Types of Breaches

  1. Minor – An example of a minor, or partial, breach is when someone fulfills an agreement, but it is not up to your standards.
  2. Anticipatory – This type of breach gives you the right to bring a lawsuit against the party before the actual breach has occurred. If you paid someone to fulfill a large project by June 1st, but it is May 31st and they have not begun, you may claim an anticipatory breach.
  3. Fundamental – In this type of breach, you may have entered into a lease agreement only to find out that, on moving day, the landlord rented your space to another business.
  4. Material – One of the most serious types of breaches, a material breach of contract is a failure to perform or complete one’s duties under the agreement. If you provide a service or product to someone who then fails to pay you, he or she has committed a material breach.

How Does a Breach Affect Your Small Business?

It is important to assess and respond promptly to a perceived breach of contract. Many breaches, especially material ones, can result in a negative economic impact on your business. If a vendor or supplier fails to deliver a product on time, the damages can be catastrophic. They may even lead to a breach on your part for failure to deliver down the supply chain. If you are a victim of non-payment, this could affect your ability to pay your bills or purchase inventory. A small business attorney will ensure you maintain valid records and represent you in the event that a contract has been broken or resulted in harm to your business.

What Should You Do About a Breach?

You may want to settle a breach as swiftly as possible with little to no interruption to your business operations, but it is paramount that your rights are upheld. In most cases, all parties would prefer to minimize the time and resources invested in a dispute. You might request that the offending party take corrective measures in order to be compliant. You may even collect monetary damages without having to go to court. But when you find there is no other way, there are legal remedies for a breach of contract.

Three Types of Remedies for a Contract Breach

  1. Damages – Payment of damages include compensatory, punitive, nominal, and liquidated damages.
  2. Specific Performance – A court-ordered performance of duty under the contract may be used when damages are inadequate.
  3. Cancellation and Restitution – A contract may be canceled by the non-offending party who may also sue for restitution.

If you need help with your business contracts, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email:

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Copyright Infringement and Billing the Federal Government

Recent developments coming to light regarding the use of music in torture by the CIA in Guantanamo indicated that Canadian industrial band Skinny Puppy’s music was one of the artists whose music was being used. As a semi-serious response, Skinny Puppy has since invoiced the Federal Government for $666,000 for the use of their music without permission or licensing from the group and is considering a lawsuit.

Skinny Puppy’s self-described “unsettling” music being used in torture was not surprising to them, but they were not very happy about it. It is interesting given the group’s history as well. Skinny Puppy has been a long-time proponent for animal rights and against animal dissection and other practices that Skinny Puppy considers akin to torture of animals.

While there have been numerous reports over the years of different music from Metallica to Sesame Street being used in such ways, nobody has appeared to try and take legal action for it yet. Nevertheless, it would likely end up being a long and unsuccessful road trying to fight the Federal Government against these practices.

Owners of copyrights have the exclusive rights to all of the following under 17 U.S.C. § 106, and if you do one of the following without being an owner then it would classify as copyright infringement:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

Since there is no evidence the government copied or distributed Skinny Puppy’s music, it looks like the big question is whether or not using the music in a prison in Cuba would constitute a “public performance” under the law or if the government is otherwise protected in its use. It will be interesting to see how much further this action goes.

If you have questions about copyright or other intellectual property rights for your music or business, contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer, Elizabeth Lewis, 720-258-6647 or email her at

Another Twitter lawsuit

Several weeks ago, I talked to people about the Chicago Twitter defamation case. Monday, another case regarding defamation surfaced. This time, it involved celebrity Courtney Love and a dispute with a designer. The designer accuses Courtney Love of using twitter and her website to defame her. Among the accusations are that Courtney Love used these mediums to allege she was a drug addict, a prostitute, and some other words that I don’t want to publish on my blog.

According to the San Francisco Chronicle, Courtney Love’s attorney has stated “It is important that this cherished right not be marginalized when speech is communicated via the Internet. Ms. Cobain (Love) enjoys using Twitter and expressing her views … to her fans and those who are interested in following what she has to say.”

Although most of my readers (I think) aren’t famous, the question still arises – what is safe and what isn’t safe to say on my blog or website. Unfortunately, this really depends on who you are and what you do. For instance, if I was an advising an accountant, I would say that you need to be careful about what tax advice you give (along with thousands of other things). I would advise a teenager to be careful about posting explicit information or pictures about another teen (in addition to a thousand other things). For pretty much everyone, I would say to be careful posting anything untrue about anyone or something that you wouldn’t want said about yourself.

Just like with any other media, if you say something that is an outright lie (i.e. Elizabeth Lewis is a terrible artist, because, come on guys, I can actually draw, paint, and take photographs!), you can face defamation charges. So, for instance, if in the case described above, the person isn’t actually a drug user or prostitute but the information was posted to cause people to stop using her, there could be a problem. However, on the other hand, if the person is a drug addict and prostitute, it would be hard to argue defamation.

In order to make sure either you, or your company, is safe from law suits, it is always good to have someone familiar with online law to review what you are posting online. For instance, I review companies’ communication policies to ensure that anything said online or offline about the company or its clients isn’t going to cause the company problems. I also review companies’ websites and literature to ensure it is okay to print. So whether it is in print or online, if you are going to be printing something, make sure you are in compliance with defamation, advertising, and any other laws that may apply!