Breach of Contract Attorneys
Breach of Contract
When you enter a legal contract with another party, you expect them to honor the terms of the agreement.
Breached contracts are common and serious issues for both individuals and businesses. Relying on others to uphold their contractual obligations is a fundamental aspect of every business. When a party to a contract fails to abide by an agreement, it can result in significant financial losses.
Businesses and individuals can benefit from experienced business contract lawyers before signing contracts, to ensure their interests are fully protected. Experienced business attorneys will ensure that your contracts include provisions that provide adequate protections, safeguards, and remedies in case the other party breaches the agreement.
What is a Breach of Contract?
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A breach of contract claim generally arises when there’s a failure to abide by the terms of a contractual agreement. This may include, but is not limited to failures to deliver goods or services, an unfinished job, failure to pay, and much more. Breach of contract claims arise in business to business contracts, business to consumer contracts, and consumer to consumer contracts. If you have entered a contract with another person or company and they do not meet the obligations of your legally binding agreement, they are in breach of contract.
Material vs. Immaterial
One of the first things an attorney must do is review the contract terms and facts surrounding the breach of contract claim in detail. A breach of contract may be categorized as material or immaterial, depending on the kind of damage caused by the at-fault party. An example of a material breach is when a party to a contract has failed to perform their obligations in a manner that makes it impossible for the contract to be fulfilled. In cases where results vary significantly or a party obtains substantially less gains, the material breach can cause you serious financial harm and you are entitled to compensation for such damages. An immaterial breach occurs when most of the duties stipulated in the contract have been performed, but not all of them.
Remedies in Breach of Contract Claims
When one party breaches a contract, the non-breaching party may sue for several different types of damages, including money damages and equitable relief.
Compensatory damages can include reliance damages, expectation damages, and other types of financial losses. Compensatory damages are intended to “make the plaintiff whole” and provide monetary relief representing the benefits the plaintiff would have received if the other party had not breached the contract.
Compensatory damages may also include consequential damages (such as lost profits), which are intended to provide compensation for any indirect losses caused by the breach of contract. However, many contracts substantially limit the types of damages that a non-breaching party may seek. Therefore, it is essential to have an experienced contract drafting attorney review and help negotiate the contract terms before a contract is executed.
Liquidated damages are also available in certain circumstances. Some contracts contain a liquidated damages provision, which provides a specific, predetermined amount of money that a court or arbitrator can award to the aggrieved party if the contract has been breached. Liquidated damages are especially common in real estate purchase and sale agreements. Liquidated damages provisions in contracts may be enforceable if the damages resulting from the breach are not readily ascertainable, the amount of liquidated damages provided under the contract is not grossly disproportionate to the actual damages incurred, and specific language and font sizes are used in the liquidated damages clause. Sometimes, liquidated damages clauses can be challenged based on certain circumstances.
Restitution forces the breaching party to forfeit their ill-gotten gains. The goal of restitution is to return the non-breaching party to the position they would have been in had the contract never been made. In the context of real property purchase transactions, the remedy of restitution involves the breaching party (seller) to reimburse the non-breaching party (buyer) for the money it paid for the real property and taking title back to the property.
This breach of contract remedy would involve a decree ordering the breaching party to fulfill a contractual obligation. In the context of claims for specific performance in real property transactions, the party bringing the claim is required to file a notice of pendency of action.
ATTORNEYS’ FEES AND COSTS
In California, the general rule is that each party is responsible for its own attorney’s fees in a legal dispute, unless: (1) the contract contains an express attorneys fee provision entitling the prevailing party to recovery of attorney’s fees; or (2) a statute allows for recovery of attorney’s fees.
What are the required elements for a breach of contract claim?
Breach of contract attorneys will need to review the contract and determine what rights you have, what obligations the other party has, and what remedies are available to you. Both individuals and businesses can file claims to resolve breached contracts. Whether you’re a business owner, service provider, commercial tenant, or an employee, you have the right to file a claim when another professional or business has broken your contract. If you file a breach of contract lawsuit, you must prove three elements to prevail:
Existence of a Valid Contract.
In an enforceable contract, at least one party must make a promise to do, or refrain from doing, a specific act in the future. The contract does not become legally binding until each party accepts its terms. A method of acceptance (such as oral, written, handshake, in-person, or through the fulfillment of a certain act) is often specified in the contract’s offer.
Breach of the contract's terms.
A contract breach occurs when one party fails to do something that the contract requires. Breaches can be material or non-material, as noted above.
Damages Resulting from Breach of the Contract.
Even if there is a legally valid contract and a breach occurs, if the non-breaching party does not suffer any type of financial harm, then they may not have a valid breach of contract case. Damages might include lost profits, income, or benefits, or be more indirect damages, such as damage to a company’s reputation.
Resolving a Breach of Contract Claims in California
You may be able to resolve breach of contract claims through mediation, arbitration or breach of contract lawsuits filed in superior court. A contract may contain specific provisions regarding how the parties will handle breach of contract claims. A contract may contain language stating that the parties waive rights to a trial by jury, or that the parties must submit claims to arbitration. Depending on the particulars of your case, the court may require the other party to perform their obligations or may serve an injunction against them. You might also get restitution, which requires the offending party to give you property equivalent to the value of your loss or a sum of money that reflects the extent to which the breach has injured you.
Frequently Asked Questions
A breach of contract occurs when one party fails to fulfill its obligations as outlined in a legally binding agreement. It can take various forms, such as failing to deliver goods or services, missing deadlines, or not meeting quality standards. A breach can have significant consequences for the parties involved in a business agreement. The non-breaching party may suffer financial losses, damaged reputation, or disruptions to their operations. Conversely, the breaching party may face legal action, including monetary damages, injunctions, or other remedies outlined in the contract. Resolving a breach of contract often involves negotiation, mediation, or litigation to determine liability and assess damages. Clear contract terms and dispute resolution mechanisms are crucial to addressing breaches effectively and mitigating their impact on the parties involved.
Contracts across various industries and business relationships can be subject to breaches, including but not limited to:
Vendor Contracts: Breaches can occur when vendors fail to deliver products or services as specified.
Employment Contracts: Breaches may happen when employees violate terms related to confidentiality, non-compete agreements, or job performance.
Service Agreements: Service providers may breach contracts by not meeting performance or quality standards.
Real Estate Contracts: Breaches can involve failure to close a real estate transaction, non-disclosure of property defects, or non-compliance with financing terms.
Partnership Agreements: Breaches may include disputes over profit sharing, decision-making, or the failure to fulfill partnership obligations.
Intellectual Property Contracts: These can be breached through copyright or trademark infringement or violations of licensing agreements.
The most frequent reasons for contract breaches include financial difficulties, changes in circumstances, disputes over contract interpretation, failure to meet deadlines or performance standards, and sometimes intentional non-compliance. Effective contract drafting, communication, and dispute resolution mechanisms can help mitigate these risks.
Our law firm provides invaluable assistance in identifying and proving a breach of contract. We begin by conducting a comprehensive review of the contract terms and the circumstances surrounding the alleged breach. Our experienced attorneys work diligently to gather evidence, including correspondence, documents, and witness statements, to establish that a breach has occurred. We then assess the damages suffered by the injured party, which can include financial losses, lost opportunities, or harm to reputation.
Once a breach is established, we help the injured party pursue remedies available under contract law, which may include:
Damages: Monetary compensation to cover actual losses incurred due to the breach.
Specific Performance: A court order requiring the breaching party to fulfill their contractual obligations as originally agreed.
Injunctions: Restraining orders to prevent the breaching party from taking certain actions.
Rescission: The contract may be canceled, and both parties restored to their pre-contract positions.
Liquidated Damages: Predetermined damages specified in the contract for a breach of specific terms.
Our firm's expertise in contract law, negotiation, and litigation enables us to advocate effectively for the injured party, pursuing the most suitable remedies to rectify the breach and protect our client's interests.
If you suspect a breach of contract in your business dealings, taking prompt and strategic steps is crucial. First, carefully review the contract to ensure that the alleged breach is indeed a violation of its terms. Document any evidence, correspondence, or communications related to the breach. Then, consider the following actions:
Open Communication: Initiate communication with the other party to address your concerns and attempt to resolve the matter amicably.
Consult an Attorney: Seek legal advice from our experienced attorneys who specialize in contract law. We can assess the situation, determine the strength of your case, and advise you on the best course of action.
Negotiation or Mediation: Engage in negotiations or mediation to reach a mutually acceptable resolution without resorting to litigation.
Litigation: If necessary, our attorneys can file a lawsuit on your behalf to enforce the contract or seek damages for the breach.
Our firm is dedicated to protecting your interests and will work tirelessly to pursue a resolution that aligns with your goals, whether it involves negotiation, alternative dispute resolution, or litigation. It's essential to act promptly and consult with legal experts to maximize your chances of a favorable outcome.
Legal defenses against allegations of breach of contract can vary depending on the specific circumstances of the case. Common defenses include disputing the existence of a valid contract, asserting that the contract was improperly formed due to fraud, duress, or misrepresentation, arguing that the contract terms were ambiguous or not clearly defined, demonstrating that the alleged breach was not material or that the plaintiff failed to fulfill their own contractual obligations, and invoking force majeure clauses in cases of unforeseeable events. Our firm, with its experienced team of contract law attorneys, can provide essential assistance to clients facing breach of contract claims. We meticulously analyze the contract in question, scrutinize the facts and circumstances surrounding the alleged breach, and leverage our legal expertise to craft robust defenses tailored to the unique aspects of each case. Our goal is to protect our clients' rights and financial interests while pursuing the most favorable outcome, whether through negotiation, arbitration, or litigation.
Initiating a breach of contract lawsuit typically begins with consulting an attorney who specializes in contract law. Once retained, your attorney will draft a complaint outlining the allegations, identify the parties involved, and specify the desired remedies or damages sought. This complaint is then filed with the appropriate court, and the defendant is served with a summons to respond. Timelines for a breach of contract lawsuit can vary widely, depending on court caseloads, complexity of the case, and potential pre-trial negotiations. Clients should expect the process to take several months to several years. Costs may include attorney fees, court filing fees, and other expenses related to litigation, which can also vary. Potential outcomes range from negotiated settlements to favorable court judgments or, in some cases, dismissal of the claim if the contract's validity or breach is successfully challenged. The specific details and potential outcomes of a breach of contract lawsuit can vary significantly depending on the facts of the case, the applicable laws, and the effectiveness of legal strategies employed by your attorney.
Breach of Contract Attorneys
If another party has not fulfilled their contractual obligations, Real Estate Law Corporation has experienced breach of contract attorneys that serve clients in the greater Sacramento area and all over California. Our breach of contract attorneys regularly assists clients with breach of contract claims. Due to our expertise and commitment to excellence, many of our business clients utilize our firm’s general counsel services.
To schedule a consultation with one of our business attorneys, simply call us at (916) 848-0080, or use the contact form below.