Contracts are at the heart of our commercial system. Your business is based on a contract among your partners, members, or shareholders. Your relationships with your vendors are governed by contract laws. Business loans and lines of credit, capital investments, mergers, and acquisitions, are all based on contract. Employees and officers also are subject to contract law. So whenever a business dispute arises, there is almost always a claim for breach of contract.
The beauty of contracts is that they are transparent. Unlike other legal theories that require study of statutes and case law to determine what duties the parties are under, contracts make explicit what is expected of the parties.
Unfortunately, that does not mean contracts are self-enforcing. To enforce your rights under a contract, in addition to proving the breach, you must undergo the sometimes difficult task of proving how much you or your business were harmed by the breach.
Fortunately, working with an experienced breach of contract lawyer can help you fight for and win your case in court. By understanding how breach of contract claims are handled and how you can work with a qualified attorney to prove your case, you can be well on your way to receiving compensation from the damages that a breach of contract has caused.
A contract is considered a legally binding meeting of the minds that specifies the terms of an agreement. A contract does not need to be in writing to be enforceable. Obviously, however, reducing a contract to writing has significant benefits. If one of the parties does not fulfill an important part of the contractual agreement, it is considered a breach of that contract. While the recourse the other party has will depend on the specifics of the contract, a qualified breach of contract attorney can help you determine what comes next.
Business contract disputes are the most common contract disputes, as many businesses rely on contractual agreements for their operations. It is important to remember that a breach of contract does not need to be an extreme one for the agreement to be considered broken. While not fulfilling major terms of the contract is a clear case of a breach of contract dispute, if any party in the contract failed to provide even some of the services promised, you likely will still have a case where losses were incurred.
Fortunately, if a party fails to uphold its end of the contract, the other party does have options for how to proceed. In some cases, the other party’s breach may justify your refusal to fulfill your remaining obligations of the contract without penalty. For example, if you had a contract stating that you would pay for repairs on your car, and the mechanic failed to perform the agreed-upon repairs, you may properly refuse to pay. Most contract disputes, however, end up more nuanced than this.
If a breach of contract caused provable losses, you should talk with a breach of contract lawyer about your options to pursue financial compensation. A breach of contract action may allow you to recover the financial damages that resulted from the breach. Alternatively, in some cases, you may be able to sue to compel the other party to perform their portion of the agreement if it is still applicable to the situation, a remedy known as specific performance.
Section 3300 of the California Civil Code states that “the measure of damages...is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby.”
Essentially, this means that the goal of a breach of contract suit is to return the plaintiff to an equivalent position to where they would be if the breach had not occurred. The way this is awarded to the plaintiff varies based on the specifics of the case, but in general, the types of damages that can be pursued by breach of contract attorneys are:
In California breach of contract disputes, there are two main types of damages that are recognized: general damages and special damages.
General damages are the results of the breach of contract that are foreseeable. These are sometimes also known as “consequential damages.” For something to be considered part of general damages, it will have to be a cause-and-effect scenario—i.e. if a contract was signed for the sale of a vehicle but the buyer did not provide the money, the funds owed would be part of the general damages of the case.
Special damages, also known as “incidental damages,” are more dependent on the specific situation surrounding the contract. They will include losses that are more conceptual, such as the losses that the car seller sustained by keeping the car off the market in anticipation of the sale. These special damages can only be recovered if it is determined that the defendant was alerted to these specific circumstances, which is where a good breach of contract lawyer comes in.
A breach of contract in California can be eligible for a lawsuit whether it is a total or a partial breach of the agreement. A total breach refers to a situation where the offending party does not follow through on any of the contractual obligations that were agreed upon in the contract. A partial breach, however, occurs when their obligations are not fulfilled to a proper standard or are only partially completed. A breach of contract lawyer will be able to discuss these specifics with you to help you determine exactly how many damages you are eligible to pursue based on the degree to which the contractual agreements were fulfilled.
Critical to determining whether a breach of contract is enforceable is whether the breach was material or immaterial in nature. A material breach of contract occurs when the breaching party violates important terms of the contract. For example, where initial work on a development is delayed a short time, that may not be material. But where the grand opening of a hotel is planned, a contractor’s failure to timely deliver the promised signage in front of the building, that breach will be material. An immaterial breach may not be actionable as a breach of contract, or will not result in provable damages or losses. In the event of a total breach of contract, it will almost always be considered a material breach, but in some cases, immaterial damages may also be pursued. In a partial breach of contract, the damages may be considered material or immaterial depending on the situation at hand.
To be considered a breach of contract from a legal standpoint, there are four essential elements that must be present. As you work with your breach of contract lawyer, part of their services involve helping you prove that these elements are present so the court will hear your case. To showcase that your case is valid, here are the elements that must be displayed by your breach of contract attorney to the court:
Because every contract is different, every breach of contract lawsuit will be different as well—which is why having a qualified breach of contract lawyer on your side is so important. In general, the steps to file a breach of contract lawsuit are as follows:
If you have been the victim of a breach of contract, the first thing you will want to do is find a qualified attorney to represent you as you fight to recover losses. A good attorney will first tell you whether you have a case, and when you should pursue it, and in what venue or venues you may pursue it. For example, some contracts contain mediation or arbitration provisions that require you to attempt to mediate your claim, or make binding arbitration the exclusion mode of litigating your claim. Some contracts also may contain venue provisions that require the claim to be litigated in a certain state or county. You should talk with as many attorneys as it takes for you to find one that feels like a good fit, so you can be certain you are working with the best talent possible.
Once you officially enter into working with a breach of contract lawyer, they will file your formal complaint, or a demand for arbitration if required by contract, to kick off the case. The complaint will contain the cause of action (in this case, the breach of contract) and a summons. From there, the complaint will be served on the defendant to make them aware of the suit.
A defendant will have 30 days from the date they were served to respond. They can either answer the complaint, which will move the case along, or challenge it, such as by demurrer or motion to dismiss, which will result in a hearing.
If the defendant challenges the complaint, there must be a hearing to proceed, which can take up to two months, or possibly more. If the court sustains a demurrer to the complaint, typically the court will grant the plaintiff leave to amend to resolve the defects. A new complaint will then be filed within the time ordered by the court. This will continue until the complaint is answered by the defendant or the complaint is dismissed.
During the discovery procedures, your breach of contract attorney will do all the research necessary to gather the information about your case. They will use strategies including demanding documents, depositions, subpoenas, admissions, and interrogatory responses to gather the facts and help build your case against the defendant.
Once the discovery period has been deemed sufficient, there will be a hearing by the court to determine if the case is ready to proceed to trial. If so, they will set the trial date and give any final preparation instructions.
Many cases are able to be settled before the trial date in a way that is sufficient for both parties, and during this time, your attorneys can negotiate to reach a favorable outcome. However, if no outcome is able to be reached, the case will go to trial where the court will decide the final verdict.
There are many factors that can influence how long your breach of contract dispute will take to be resolved. The strength of each party’s argument, the expertise of your attorney, the court hearing the case, and other details can have a significant impact on the length of time you will spend seeking damages. The simplest breach of contract lawsuits submitted to mediation or arbitration might be resolved within a few months. Where litigation in court is required, however, expect at least 18 months to two years before a judgment is entered. In general, breach of contract disputes that are settled outside of court are completed much more quickly than those that go to trial, but that is dependent on having an attorney that is able to negotiate and reach a satisfactory settlement on your behalf.
In the state of California as everywhere else, contractual disputes are considered under the civil standards of proof, which are lower than the criminal standard. The concept of the burden of proof relates to the strength of the evidence that must be established before the judge or jury may decide a claim in favor of the plaintiff. For criminal cases, proof must be beyond a reasonable doubt to be considered. For civil cases, however, the burden of proof requires only that you are able to show that your argument is more likely true than not. This is referred to as the preponderance of the evidence standard.
Breach of contract attorneys are tasked with showcasing a burden of proof in the cases they take on by proving that the four essential elements are present: (1) that a contract existed, (2) that the plaintiff’s obligations were performed, (3) that the defendant’s obligations were not performed, and (4) that damages and/or losses were caused by the defendant’s not performing its obligations.
In certain situations, these things will be harder to prove than others—which is why working with a California breach of contract lawyer you can count on is so important to have your case heard and your damages recuperated.
As with many other types of legal disputes, in California, breach of contract lawsuits are subject to a statute of limitations—essentially, a lawsuit must be filed within a timely manner for the case to be considered. Because every contract is different, a breach of contract attorney can help you navigate the nuances, but there are general guidelines that can help you stay informed.
California law determines how long the parties have to file a suit. For written contracts, the party has four years from the contract’s signing date to file a suit. For oral contracts, the party will only have two years from the date of the agreement. For promissory notes, the statutory period is six years. In some cases, parties may write a shorter period into their agreement.
While this may seem like a long time, it is best to not let the clock run out on your dispute if you think you might have a case. Talking to breach of contract lawyers early on can help you determine if and when you would like to file so you can make an informed decision on how to proceed.