Your Business Is In A Breach of Contract Dispute: What You Need to Know

Do you think your company should be suing for breach of contract? Has your business been sued and you need to know how to protect it and defend the lawsuit?

In either case, get ready to navigate the complexities ahead with this definitive guide and some help from the contract attorneys at Davis Business Law. Our attorneys can break down the possible contract issues, the steps for a contract lawsuit, explore the outcomes you can pursue, and equip you with the essentials to enforce your rights under the written contract. Call us today for a free initial evaluation.

Key Takeaways

• To determine if a breach of contract occurred, examine your contract for fundamental contract law elements, and assess whether the terms have been violated.

• Prepare for a contract lawsuit, which involves gathering evidence, assessing damages, and drafting a demand letter, with legal expertise critical at this stage.

• Defenses against breach of contract claims can include fraud, lack of consideration, impossibility, and the statute of frauds, each requiring specific evidence we can help you identify and obtain.

Determining Whether a Breach of Contract Occurred

When dealing with a breach of contract, the first step is to determine whether a valid contract exists and whether the other party breached that contract. The validity of any legally binding contract relies upon its essential components: offer, acceptance and mutual exchange of value (consideration).

Once we have confirmed that such a legitimate document exists between two or more parties involved in this particular affair, we can help your company assess if one side has neglected their contractual obligations by breaching. We can then analyze contract law to evaluate whether the other party caused your company harm.

Identifying Contract Terms

In order to assess if a breach of contract occurred, one must first recognize the conditions and obligations that each party consented to in the contract. This requires taking a careful look at contract law and all of the contractual details.

Determining what certain words mean can be difficult, but contracts normally set out definitions applicable across the entire document, except where stated otherwise. If there is any confusion with regards to language usage, external evidence may be brought into play for better understanding. Most contracts guarantee that their stipulations remain binding unless circumstances dictate otherwise and most state laws tend to honor contract obligations.

Assessing Performance

Analyzing the performance of each party to the contract is a key element in recognizing when there has been a breach of contract. This requires an examination of how well all parties have lived up to their side of what was agreed upon by both sides. Parameters such as expenses, punctuality, dependability, reaction times, quality and constancy can be used for evaluation purposes.

Not abiding with contractual obligations or not fulfilling duties that were supposed to be fulfilled are signs that could suggest some form of violation – known as “breach” – might have taken place within this agreement between two entities: one party versus another. Such commitments include anything defined during said agreement which if either individual does not meet it would classify as being a material breach.

Preparing for Legal Action – Whether Attacking or Defending

When a contract is allegedly breached, it’s important to take prompt steps to prepare for litigation. That includes collecting and protecting evidence of the breach, assessing any possible losses incurred by that breach, and writing or replying to demand letters.

Having an experienced lawyer who specializes in business contracts available can be invaluable throughout this complicated process. Out Davis Business Law contract attorneys will assist you with gathering proof, determining reasonable damages inflicted due to said breach, and forming compelling demands either when pressing charges or while defending them against somebody else’s claims. A savvy attorney on your team could very well turn out decisive in the end result of your case – whether offensive or defensive oriented – so having one around may prove fruitful indeed!

Gathering and Preserving Evidence

When it comes to legal proceedings involving breach of contract, evidence plays a key role. This may include agreements and contracts, financial documents, communication exchanges between the two parties involved, as well as testimony from witnesses and expert opinions.

In order to safeguard relevant proof for such lawsuits properly, taking precautionary measures is essential – an evidence preservation letter should be addressed right away to whoever is deemed responsible, implementing litigation holds in place that protect any pertinent paper or digital data, forming document retention policies which detail how information needs to stay safe while its validity stays intact too.

Calculating Realistic Damages

Accurately estimating damages is also critical. This process requires calculating the financial impact associated with the alleged breach and entails making informed guesses about realistic losses and the possible outcomes of the case. The overall objective here is quantifying any financial losses that have been suffered due to the breached agreement.

Comparing anticipated net profit versus actual net earnings after conflict is often done as part of this workup. Evaluating possible losses always requires evidence and often requires an expert opinion. Experienced legal counsel can help your business with both.

Sending or Responding to a Demand Letter

A demand letter serves as a notable step in the legal process. It is an official way of noting any breach and laying out paths towards settling it. Constructing a demand letter includes detailing the violation, specifying any conditions that have been breached, putting forth what must be paid off and offering potential resolutions. With clarity, formality and civility being key components when writing one – having such effectively worded could result in getting to a settlement without taking judicial action.

Responding to a demand letter should be equally meticulous. A response full of bombast and lacking in legal analysis will not do much to resolve the dispute. An experienced contract lawyer can help identify your risk, tell you if there is a chance your business made a mistake, and provide a reasonable path forward that gives your company the best possible outcome.

Suing For Breach of Contract

If negotiations are unsuccessful and a lawsuit seems the path forward, understanding how to pursue or answer and defend a breach of contract lawsuit is vital. If you are bringing the case, you should evaluate the most appropriate jurisdiction and place for your suit unless stated otherwise in the agreement itself.

It’s important for your company to consult with a trusted contract attorney before filing any legal documents as the attorney can review your situation, provide counsel through each step of proceedings, and build your strongest case from the very beginning.

Defending Against a Breach of Contract Lawsuit: Possible Defenses

A breach of contract claim has many possible legal defenses. With any defense, your business must present events, such as when claiming fraud or showing unforeseen circumstances which prevent fulfillment in cases involving impossibility. Defenses may include, statute of limitations issues, failure to seek the proper process or remedies under the contract, lack of consideration, statute of frauds and so on. With available defenses at your disposal, your company can explain why it is not liable to the other side for breach, and your attorney can help with this.

Fraud – Defeating a Contract Built on Lies

Fraud can be used as an effective defense to a breach of contract claim. This would mean demonstrating that the other party intentionally deceived you in order for them to enter into the agreement. Evidence must exist which proves deceptive behavior such as contradictory statements or purposeful attempts at confusing or hiding things.

If you can prove fraud, then it is possible to void the contact, and even possible to seek potential damages from the fraudulent party.

Lack of Consideration – There Must Be An Exchange

Lack of consideration could be used as a defense in a contract case. A “lack of consideration” means that when the agreement was formed, no value was mutually exchanged between both parties, thus making it invalid or unenforceable.

A valid contract must have some type of exchange from each party to make it binding. For instance, Joe promises to give Sally $100 and Sally promises to give Joe ten widgets. Without valid consideration flowing to both sides of the contract, it is possible to void a contract and defend a breach of contract claim.

Impossibility – Sometimes Performance Isn’t Possible

The defense of impossibility comes into play when a contractual obligation cannot be fulfilled due to an unanticipated event. In order for the argument to stand, evidence must show that the event was not reasonably foreseeable at the time of entering into agreement and it rendered performance not possible.

Statute of Frauds – When a Handshake Isn’t Good Enough

The statute of fraud is a law that stipulates certain types of contracts must be in writing and signed by the parties for it to become legally binding. Contracts that must be in writing include agreements related to land purchases and agreements that cannot be fulfilled within a year. In cases where a written contract should exist but does not do so, the statute can act as a defense.

Legal Remedies and Outcomes to Breach of Contract Claims

A contract dispute can have several different strategies and potential outcomes. Examples include seeking or obtaining an injunction (in which a court forces the other side to stop doing something), seeking financial compensation the breach caused, forcing specific performance under the agreement, or cancelling or voiding the contract outright.

What action you can take depends upon the contract language and the circumstance. An experienced business attorney can help you decide which path is best to pursue. When your business is evaluating damages, remember that a court’s goal is typically restoring that a harmed party to the condition it would have been in in a breach had not occurred.

Injunctive Relief

Injunctive relief is a court mandate ordering someone to either carry out or abstain from specific actions. Your company can seek this type of remedy if you can prove that it would suffer irreparable damage unless a court issued the injunction.

If granted, an injunction may remain in effect for the entire course of litigation, and sometimes even permanently following its conclusion. A court will often require the party seeking an injunction to secure a monetary bond to repair the other side in the event a final trial finds the injunction was improper.

Monetary Damages

Compensatory damages, also referred to as monetary damages, are awarded to the winner in a breach of contract case. Their purpose is to reimburse the non-breaching party for any losses that have been sustained because of the breach. This type of compensation helps restore the injured party to the condition it would be in if the breach had not occurred.

Calculating these payments can be complicated and sometimes requires comparing expected profit to actual returns. This type of argument requires detailed evidence and sometimes an expert opinion. If your company wants to claim lost profits, it is wise to seek help from an attorney.

Specific Performance

In certain cases, the court may order specific performance when damages alone are not sufficient. This remedy requires the breaching party to honor their contractual responsibilities and obligations in a situation where it is difficult or impossible for an exchange of money to fix a problem. Courts are hesitant to force two parties who are already in a dispute to continue to work with each other, so this type of remedy is less common.

Contract Cancellation

In many breach of contract disputes, cancellation is a possible outcome and involves terminating the agreement and relieving both parties of any additional obligations they owe each other concerning this matter. To restore their original financial status before the infringement occurred, restitution usually comes into play too, returning goods or money that were exchanged under the terms of said contract.

Get Contract Law Help From Business Contract Attorney

Dealing with a contract dispute can be complex and hiring an experienced business attorney with experience in contract disputes is very valuable. Your attorney will help identify potential defenses as well as provide legal representation in negotiations and if going to trial is necessary.

When there are questions regarding filing suit for breach of contract or defending against accusations of breach, your company would be wise to consult a lawyer before making any decisions. Davis Business Law’s team of experienced contract attorneys stands ready to provide you with a free initial evaluation and zealous representation.

Frequently Asked Questions

What qualifies as a breach of contract claim?

A breach is when one of the parties in a contract doesn’t fulfill their duties. Such an occurrence happens when there is failure on behalf of either party with regards to honoring what was agreed upon by both sides to the contract.

What damages are awarded for breach of contract?

Damages that can result from a contract breach could include compensatory damages, liquidated damages, rescission and also specific performance or an injunction. Often the contract will include language about damages. Some contracts discuss who is responsible for attorneys fees. It’s sensible to consult with an attorney.

How do I determine if a breach of contract has occurred?

An attorney can help you identify whether there is a breach by analyzing the contract language and comparing that against each party’s expectations and the facts of what actually occurred. If one party fails to follow through on their responsibility under the agreement, then this would constitute a violation.