Do You Have to Perform Under a Contract When the Other Side Breaches?

In any breach of contract cases, it is common to have both parties suing each other, both alleging that the other breached its obligations under the contract. But what happens in that situation: can two parties be in breach of an agreement, and if one party breaches, does the other party to the contract still have to perform its obligations under that contract?

Prior Breach

Like many states, Florida follows what is known as the prior breach doctrine.

The prior breach doctrine says that once a party breaches its obligations under the contract, the other party is relieved of its duties under the agreement. The breach by the first party is seen as a discharge of the duties the other side of the contract has under the terms of the contract

So, in a simple example, if I am supposed to pay you to paint my house on Monday, and I don’t pay you, you are relieved from having to paint my house. I can’t turn around and sue you for not painting.

Materiality

The initial breach must be material—the other party can’t just get out of a contract because the initial breaching party breached some minor detail of the contract, or some insignificant duty that doesn’t impact the purpose of the contract. The breach must go to the heart, or essence, of the agreement. The nonbreaching party must really have suffered a loss because of the breach.

The initial breach must significantly affect the other side, and must destroy the nature and purpose of the contract. In our painting example, the whole reason you agreed to paint my home was to get paid, making the nonpayment a dependent, material part of the agreement.

However, if the contract had said that I will wear proper protective gear while painting, or if it had said that I will park across the street while I paint, and I breached those provisions, that would not go to the heart of the agreement. You can still get what you want out of the agreement-getting your house painted– despite my breach of any of those hypothetical provisions.

No Waivers

There also cannot be a prior waiver. So, if I did not pay you Monday, and you said “no problem, just bring the money on Tuesday,” you may have waived the right to claim a breach. Thus, you could not back out of painting my home.

Course of conduct can also constitute a waiver—if I paid you Tuesday and you accepted it and said nothing, your obligation to paint my home would remain. You need to object to the initial breach, in order to back out of the contract yourself afterwards.

Problems enforcing a contract, or are you getting sued for breaching a contract? Call the West Palm Beach business litigation attorneys at Pike & Lustig today for help with your contract law or contractual enforcement case.

Sources:

casetext.com/case/branch-banking-trust-co-v-ss-dev

casetext.com/case/edward-waters-college-v-johns