What happens when both parties breach a contract?
The contract is not instantly terminated when one side violates it. Usually, the agreement is still valid, and both parties are still obligated to abide by its provisions. This enables a court to continue to hold parties responsible and to compel them to pay damages in accordance with the terms of the contract. The other party is still obligated by the contract because one party’s breach does not cause it to be terminated.
The second party is still required to abide by the conditions of the contract because it is still in effect after the first breach. This means that the other party cannot just ignore the contract or walk away from the agreement. Anything they do to break the agreement will also be regarded as a breach.
A second breach does not annul the contract either, similar to the first. Instead, both parties are regarded as in breach and may bring claims for contract breach against one another.
Both parties may still file a lawsuit for breach of contract and demand damages because violating a contract does not nullify it. Although there may be grudges on both sides, that does not make the other party’s infractions any less serious, and both parties may be entitled to compensation.
