You hire a restaurant to provide catering for a big event. Everyone signs a contract and you are excited about the food for the event. The event rolls around and the people arrive–but the food does not. What can you do? You may be able to bring a breach of contract lawsuit. Breach of contract lawsuits are one of the most common types of business claims; nevertheless, they can be time-consuming and expensive. Learn what they entail.
What is a Breach of Contract Lawsuit?
Anytime that there is a contract for any service or product, and one party does not hold up his end of the bargain, a wrong has been committed. Sometimes, when a person fails to honor his end of the deal, legal action can be pursued. This is referred to as a breach of contract lawsuit. The person who contracted with the person who did not honor the contract can bring an action seeking damages.
What is a Contract?
A contract is a written or oral agreement creating mutual obligations. One thing is given in exchange for another thing. An obligation to perform (for instance, provide goods or a service) is created through the contract. Typically, a contract occurs if there is an offer, acceptance, and consideration. An offer is where one party offers a good or service. Acceptance is where the other party agrees to take that good or service. Consideration is what is given for that good or service (for instance, money).
Did a Contract Actually Exist?
There cannot be a breach if there was never a contract to begin with. This is why it is always important to get contracts in writing if possible. Even if something is written, a court may not consider it a contract. It is possible for courts to infer that there was a contract if the contract was oral or inferred by conduct; however, this is more difficult to prove. It is also better (if there is a written contract) to ensure it is signed. Unsigned contracts may still count as contracts, but this is also more difficult to argue.
What Did the Contract Require?
If there was a contract, then a lawyer will have to try to determine what the contract required of either party. That is, what did each party promise in exchange for what the other party promised? While this may be spelled out nicely in the contract, it can be harder to determine in unwritten contracts or vague contracts. A court will make that determination.
Did a Breach Actually Occur?
After figuring out what the parties bargained for, then it is necessary to decide whether there was a breach. A breach means that one of the parties made a promise which was then broken. For example, a tenant agrees to pay $1000 in rent in exchange for a habitable apartment. If the landlord provides an apartment that has numerous safety violations, then the landlord has broken one of the promises that he has made.
Was the Breach of Contract Material to the Contract?
There can be many different breaches of the contract. Even if there is a breach, it may not be significant enough to pursue a breach of contract case. The breach must be material. By material, it means that the breach goes to the heart of the contract. Essentially, by breaking the contract, the contracting party is not getting what they had bargained for. If you had contracted to get internet service, and the internet provider never provided internet service, that would be a material breach of the contract. However, if the internet provider provided service but at a slower speed than what you contracted for, this would probably not be a material breach (even though you would have to be compensated).
Did the Breaching Party Act in Bad Faith?
Courts must also determine whether the party who breached acted in bad faith. While it is still possible to bring a suit if negligence caused the party to not hold up their end of the deal, the court is more likely to presume that there is a material breach if the party acted in bad faith. Acting in bad faith means that there was willful noncompliance with the terms of the contract. For instance, if a party promises to provide something and never was going to follow through with it, then that would be an instance of bad faith.
What Do I Recover in a Breach of Contract Case?
One type of remedy is monetary damages. Suppose a contractor agreed to build you a pergola, started the process, but then abandoned the project. You were then forced to hire a different contractor to finish the job. They have breached their contract by not building you the pergola on the agreed-upon timeline. You would be able to sue them for the money it cost to hire someone else to complete construction. Another type of remedy is called “specific performance.” Specific performance is where a party is ordered to perform the promise that they agreed upon in the contract because monetary damages would not do. For instance, if the party agreed to provide you tickets to a once-in-a-lifetime event and then decided to break that promise, monetary damages may not appropriately cover your loss because you could not attend the event otherwise.
What if I Have a Breach of Contract Claim?
While breach of contract lawsuits are very common types of business claims, that does not mean that any law firm can or should handle them. Most firms charge an hourly rate, which could leave you with extremely high bills, as business litigation cases can result in hundreds of hours billed and many years of litigation. Our firm handles breach of contract claims on a contingency fee basis. No fees or costs are owed if the claimant does not prevail. Contact our office to discuss your case today.