Breach of Contract in Florida: What Business Owners Need to Know

Contract breaches can be disruptive, and for the party in breach, they can present significant financial risks. In many cases, a business facing the consequences of a counterparty’s breach will have no choice but to enforce compliance, and the breaching party will have to make an informed decision about whether to target a settlement or begin preparing a defense. For both parties, experienced legal representation is essential, and promptly engaging an experienced Miami contract dispute attorney can help facilitate a cost-effective resolution in light of the circumstances at hand.

7 Key Considerations When Dealing with a Breach of Contract in Florida

What do you need to know if your business is dealing with a breach of contract? Here are seven key considerations for business owners in Florida:

1. Contract Breaches Can Take Many Different Forms

The first thing to keep in mind is that contract breaches can take many different forms. As a result, if you are dealing with a contract breach, it is worth considering whether there are any other breaches you may need to address as well.

This includes both breaches that your business may be able to pursue and breaches that your business may need to defend against. If your business has multiple grounds to pursue legal action, this is something you need to know—and this is something you may need to take into account when deciding what you are willing to consider in terms of a potential settlement.

Likewise, if your business is at risk of facing a counterclaim for breach, this is also something you need to know. If pursuing a breach-of-contract claim may also mean defending against a breach-of-contract claim, this requires careful and strategic consideration.

2. Contract Breaches Can Have Many Different Consequences

Just as contract breaches can take many different forms, they can also have many different consequences. For example, depending on the circumstances involved, appropriate remedies for a breach of contract may include:

Compensatory damages
Injunctive relief (a prohibition against continued or future violations)
Specific performance (an obligation to comply with the terms of the contract)
Rescission of the contract
Termination of the contract (and enforcement of post-termination obligations)

When facing a potential breach-of-contract claim, it is critical to understand what is at stake. An experienced Miami contract dispute attorney will be able to assist with evaluating the risks your company is facing and/or evaluating the options your company has available.

3. The Contract May Limit (or Specify) the Remedies that Are Available

While contract breaches can give rise to various remedies, it is also important to keep in mind that contracts can limit (or specify) the remedies that are available in the event of noncompliance. For example, commercial contracts often include “liquidated damages” clauses that specify the amount of financial compensation available to the nonbreaching party. Alternatively, some commercial contracts include damages caps that limit the amount a nonbreaching party is entitled to recover.

These are just two examples. To ensure that you are making informed decisions, you need to make sure you have an accurate understanding of what is at stake. In some cases, liquidated damages clauses, damages caps, and other remedy-related provisions will apply in certain circumstances and not others—and this is critical to keep in mind as well.

4. The Contract May Require Liability Insurance Coverage

Instead of (or in addition to) imposing restrictions on the remedies that are available, some commercial contracts will include provisions for mandatory insurance coverage. These provisions are intended to protect both parties, as they ensure that both: (i) the breaching party does not have to cover its liability directly and (ii) the nonbreaching party has access to adequate financial compensation for its losses.

If your business’s contract includes a mandatory insurance coverage provision, you will want to review this provision very carefully. If the breach at issue is covered, this will play a central role in the next steps in the process.

5. The Contract May Include a Tight Deadline for Enforcing Compliance

Florida has a five-year statute of limitations for most types of breach-of-contract claims. However, contracting parties can—and often do—specify much shorter deadlines for enforcing contractual compliance. If the clock is ticking on your business’s ability to pursue legal action, this is something you need to know as well.

6. Many Contracts Include Mandatory Alternative Dispute Resolution (ADR) Clauses

While some contract breaches will lead to commercial litigation, many commercial contracts include mandatory alternative dispute resolution (ADR) clauses. These provisions may require mediation or arbitration (or both), and they will typically specify where the ADR proceedings are to take place.

However, in many cases, ADR clauses in commercial contracts will include exceptions for certain types of breaches. For example, if damages are not an adequate remedy for a particular type of breach, the nonbreaching party may still be able to go to court to seek an injunction or specific performance.

7. Many Contracts Include Other Dispute Resolution Provisions As Well

Along with mandatory ADR clauses, commercial contracts will typically include other dispute resolution provisions as well. For example, it is fairly typical for commercial contracts to include provisions regarding governing law, jurisdiction and venue and, to a lesser extent, liability for legal fees and costs. All of these clauses can play a role in determining what legal action a nonbreaching party is prepared to take in response to a breach, and, as a result, they require careful consideration by both parties.

Contact Us to Speak with an Experienced Miami Contract Dispute Attorney in Confidence

If your business is facing a commercial dispute related to a breach of contract in Florida, our attorneys can help you make informed and strategic decisions about your next steps—and we can take immediate legal action on your business’s behalf if necessary. To speak with an experienced Miami contract dispute attorney at Gonzalez Law Offices, P.A. in confidence as soon as possible, call 305-676-6677 or tell us how we can reach you online now.