Business LAW

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?

Real Estate Law Corporation™

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

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

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

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.

SPECIFIC PERFORMANCE

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.