In many professions, employment contracts are the standard way that employers communicate their company policies, compensation, and employee requirements to new hires. An employment contract might include clauses like the beginning and end dates for the employee’s position and a non-competition agreement, which bars the employee from working with the company’s direct competitors for a period of time after his or her employment term ends.
When one of the parties involved in an employment contract breaks one of its requirements as listed in the document, it is known as a breach of contract. A breach of contract can be minor, only creating a small inconvenience for the wronged party, or significant to the point that it costs the employer or the employee thousands of dollars. When a breach of contract occurs, the parties often resolve it through the course of action outlined elsewhere in the contract. This usually means resolving it through arbitration. This is a fairly common clause to include in employment contracts, which fall under the umbrella of employment litigation.
Types of Contract Breaches
There are four different types of breach of contract that can occur. These are:
- Material breaches of contract: This type of breach of contract is the most serious type, often resulting in significant losses for the non-breaching party. With this type of breach, the wronged party may seek compensation for the losses caused by the breach.
- Non-material breaches of contract: This type of breach is less serious than a material breach of contract. With this type of breach, the wronged party may only seek compensation for the actual damages caused by the breach. This is in contrast to the ability to recover compensation for the damage caused by the breach with a material breach of contract. The losses a party can recover from a material breach of contract claim are often greater than those recoverable from a non-material breach claim, because they are calculated by including the cost of the extra work to correct the botched job, rather than just the botched job itself.
- Anticipatory breaches of contract: This type of breach refers to a scenario where the contracted party foresees that he or she can not fulfill the terms of the contract and the parties mutually agree to terminate it.
- Fundamental breaches of contract: When this type of breach occurs, it is serious to the point that the wronged party has the right to terminate the contract and seek damages from the breaching party.
An Employment Lawyer in New Jersey Can Help
If your employer has violated the terms of your employment contract, you have the right to take legal action against the company and get the compensation you were promised. Get the legal support you need by working with one of the experienced New Jersey employment attorneys at The Sattiraju Law Firm, P.C. Our firm is one of New York and New Jersey’s premier employment law firms. Our success record includes a $2.8 million class action lawsuit on behalf of a group of truck drivers and a $22.6 million hostile work environment settlement. Do not work with a less experienced firm – contact us today to get started with our team.