Essential Elements of Breach of Contract
What is a Breach of Contract?
A contract is a legally enforceable promise to act in a certain way. The promise is usually for an item purchased or for a service or job rendered. If another party broke a promise made to you, you may be able to sue for breach of contract. To win your breach of contract case, you will have to prove three elements: the existence of a valid contract, breach of the contract's terms and damages. While a general knowledge of the elements can help you determine whether to pursue a lawsuit, only a qualified breach of contract lawyer can accurately assess the strength of your case.
Existence of a Valid Contract
To prove that you had an enforceable contract, you must establish three elements: offer, acceptance and consideration. The contract does not need to be in writing; oral contracts are enforceable if you can prove their existence.
To make a legally valid offer, the offeror, person making the offer must signal to the other parties, the offerees, an intention to enter a contract. Not all discussions of future bargains are offers; advertisements, for example, are considered to be mere invitations to negotiate a contract.
To establish acceptance, the parties must have genuinely agreed to all of the contract's essential terms. Attorneys often explain this requirement by saying there must have been a meeting of the minds. The terms of the contract must be clearly expressed and understandable. This is why written contracts are preferred to oral contracts.
Consider this illustration: A young man attempts to sell a vehicle to an old friend, sending the friend a letter that says, "You can buy my truck for 3,000 dollars." Then the friend writes back, "All right, I will buy your truck for 2,800 dollars." The parties have not formed a contract - the friend's response is a counter-offer, not an acceptance.
Finally, each party must have given and received something of value. Contract lawyers refer to this as consideration. A unilateral promise is not an enforceable contract; neither is a contract based on services rendered in the past.
Breach of the Contract's Terms
Contract attorneys refer to breaking a contractual promise as a breach. However, not every term of the contract must be taken literally. Only a breach of contract which subtracts value from non-breaching party can warrant a lawsuit. Such suits are considered material breaches. Breaches of contract that do not take away value from agreement are considered minor breaches and are highly unlikely to succeed as a lawsuit.
There are also other types of breaches. A fundamental breach is a breach which breaks a fundamental aspect of the agreement, an aspect so important that the wronged party can terminate the fulfillment of the contract. An anticipatory breach is a breach where the wronged party has every reason to suspect that a breach will occur, even if one hasn’t happened yet.
Damages for Breach of Contract
To recover for breach of contract, you must prove that the other party injured you in some way. The damages cover money lost, but may also include any time lost as well. In general, the breaching party must pay for any expenses you incurred because of the violation. In addition, the breaching party can also be ordered to pay punitive damages, payment not for the expenses lost by the wronged party, but to punishment the party breaking the contract. If the contract itself states any additional payments made to a party should the contract be broken, the terms on that contract may also be fulfilled in addition to what a court awards.
If possible, the offending party can also be ordered to complete the terms of the contract. Alternatively, the wronged party may ask the court to annual the contract and restore the position the wronged party was in before entering the contract.
For example, imagine that you entered into a contract to rent your brother's car, and your brother refused at the last minute. If you had to get a car from a rental company, your brother would have to pay the difference between the price he promised you and the price you paid the company.
Do I Need A Lawyer For My Breach of Contract?
An experienced contract lawyer can counsel you regarding the different types of damages and help you obtain the compensation you deserve.
Consult a Lawyer - Present Your Case Now!
Last Modified: 08-02-2012 01:59 PM PDT
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