Debt Collection A to Z: B is for Breach
Most people are generally familiar with the term “breach.” It is commonly used to refer to someone’s failure to adhere to the terms of a contract, agreement, or other obligation. Since breach generally relates to a contract the damages are different from what one can recover in a tort case. A tort case is a case where the duty of the defendant to the injured/aggrieved person is NOT based on a contract. The most common example of a tort case is a car accident; the defendant and injured party have no contract or literal agreement regarding their responsibilities on the highway. Instead the duty for each is established by the law and thus a violation of the law in this instance is deemed a tort which allows the injured person to recover damages for loss of property, loss of value to property, medical bills, and even pain and suffering.
In a contract case, however, a breach does not afford the other party the right to recover pain and suffering. A breach of contract allows the aggrieved party to recover damages based on the contractual duty owed by the breaching party. Common example here is where a construction company is contracted to perform repairs to a homeowner’s residence and the repairs are not done correctly. The homeowner is entitled to recover the cost to have the repairs done correctly and possible additional money for structural damages caused by the shoddy repairs. There is even the possibility of recovering incidental and consequential damages.
In the world of debt collection breach usually refers to a party’s failure to make payments or otherwise comply with the terms and conditions of a contract. In the case of a vehicle, breach can include the failure to obtain/maintain comprehensive insurance on the vehicle. However, the creditor (bank, finance company, etc.) can be in breach of the contract by wrongfully repossessing a vehicle, asserting or collecting extra-contractual and illegal fees, failure to make certain credit disclosures, and other ways.
Sometimes it is not wholly clear if a party is in breach of a contract. To get an accurate assessment of your situation be sure to contact an experienced consumer law attorney for a consultation.