Contracts and cases involving breach of contract can be quite complex and confusing. Understanding exactly what a contract is, and what constitutes a breach of contract, would be the best place to start in terms of preparing for the legal process.
A contract is an agreement between two parties, which creates a legal obligation for both of them to perform specific acts. Each party to the contract is legally bound to perform the specified duties, such as rendering a payment or delivering goods.
In order for a contract to be legally binding and enforceable, it must contain the following elements:
- Mutual Assent: Each party involved in the contract must have a shared understanding regarding what the subject matter of the contract is. An example of this would be how for a delivery contract, both parties must understand that the word “ship” does not refer to a sea vessel, but rather means “to deliver”;
- Offer and Acceptance: One party must make an offer by clearly communicating their intent to be bound in a contract. Likewise, the other party must render their acceptance. This acceptance must be made in unambiguous terms;
- Consideration: Both parties mutually exchange something of value, in order to make their agreement binding. This may simply be a formality, such as giving $1. Under specific circumstances, contracts can be enforced in a one-sided promise where only one party renders consideration;
- Capacity: All parties must have the ability to knowingly enter into the contract. A party cannot enter into a contract if they do not have the mental capacity, is underage, or do not have the authority to contract; and
- Legal Purpose: The contract must be created for legal purposes only. Contracts to sell illegal drugs, or commit fraud or other crimes, will not be recognized nor enforced.
A breach of contract may occur when one party to a valid contract has failed to fulfill their side of the agreement. The terms of a contract are what guides the parties in what they must do, and how they should do it, in order to maintain their promise. If a party does not do what the contract instructs that they do, then the non-breaching party will be allowed to take legal action. Legal action often includes filing a lawsuit against the breaching party in court.
There are three main ways in which a party can be held liable for breach of contract:
- There is an anticipatory breach. Also referred to as anticipatory repudiation, this type of breach occurs when the breaching party tells the non-breaching party that they will not be fulfilling the terms of their contract. Once the other party has been notified, they may sue for breach of contract;
- A party has committed a minor breach. A minor breach of contract happens when one party fails to perform a small detail of the contract. However, the entire contract has not been violated, and can still be substantially performed. This type of breach commonly occurs when there is a technical error with the contract, such as a wrong date, price, or typo within the terms of the contract; and
- If there is a material or fundamental breach. These are the most common types of breaches cited as the basis of a breach of contract action. The breach is so substantial that it essentially cancels the contract, because it renders performance by either party impossible.
A contract can be breached include when the contract is fraudulent, if it was formed illegally or is unconscionable, and when there is a mistake of fact present in the contract terms. The contracting parties may also include conditions that are unique to their particular contract, which will specify when a party’s actions can be considered a breach. State laws and the type of contract may include other ways in which a contract can be breached.
What Documentation and Questions Should I Prepare Before Meeting with My Breach of Contract Lawyer?
If you would like to draft a sound and enforceable contract, or find yourself involved in a breach of contract, you will want to consult with an experienced and local attorney. You should begin this process by arranging for an initial legal consultation, which is generally free of charge. An initial legal consultation is the first meeting with an attorney and a potential client. It is an opportunity to ask questions and gather information before deciding whether to move forward and hire the attorney.
Although an initial consultation does not form an attorney-client relationship, everything that is communicated with an attorney during a consultation will remain privileged and confidential. It will be as if an attorney-client privilege had formed, meaning the information may not be discussed outside the consultation room or used against you in court. Additionally, what is discussed during a legal consultation will heavily depend on each specific legal issue. However, each consultation will likely include a discussion about payment structures, and legal facts and claims.
Prior to your initial consultation, properly prepare for the consultation by gathering all documents that are related to your breach of contract case. Bringing every document you have for the attorney to review is important, as they will determine which documents are relevant. Generally speaking, some documents that you should bring with you may include any of the following:
- If your claim arose from a contract dispute, bring copies of the contract as well as any supplementary documents explaining the contract;
- Any police or accident report that was created as a result of the incident you were involved in;
- The deed or any documents relating to the property, such as an oil and gas lease, if your issue involves a land dispute;
- If your claim is an employment dispute, bring all employment records such as your employment contract, employment agreements, or timesheets; and
- Any evidence of damages, such as medical records or expenses, or any warranties or letters created by the other party.
Another reason for an initial consultation is so you may ask the attorney any questions you may have. These questions may be directly related to your case. Or, they may be questions about the attorney themselves, such as what experience they have with breach of contract claims related to yours.
What Makes a Breach of Contract Case Strong? What Makes it Weak?
It is important to review the contract for any clauses that state whether or not a lawsuit may be brought. An example of this would be how the contract terms may only allow the parties to enter into mediation or arbitration to resolve an issue. Meaning, the parties involved may only utilize alternative dispute resolution measures, and cannot bring the matter before a court. There also may be a time limit or procedure that the parties must follow before they are allowed to file a lawsuit.
A breach of contract case is strong when at least one party checks if there are certain elements present for the case. Most breach of contract claims typically involve proving the following four factors:
- That they have entered into an actual contract, which is considered to be valid according to contract laws;
- That they upheld their end of the bargain, despite the other party not doing their part;
- That the breach amounted to a material or substantial violation of the terms of the contract; and
- The losses they suffered were in fact caused by the breach, and can be calculated with a reasonable degree of certainty.
Generally speaking, minor or technical errors in a contract will not qualify for breach of contract claims.
When Do I Absolutely Need a Lawyer for a Breach of Contract Issue?
If you are party to a business contract, or if the terms of the contract involve something that is of great value, you should contact a local business attorney or contract lawyer for issues related to a breach of contract. An experienced and local business or contract attorney will possess a thorough understanding of your state’s laws regarding breach of contract.
An attorney can help you draft, review, edit, and negotiate the terms of your contract. Having an attorney assist you may help to prevent a legal dispute over contract terms in the future. You should also speak with an attorney if you want to sue or are being sued for breach of contract. An attorney can help you prepare your case, as well as determine whether any legal defenses or remedies are available to you. Finally, an attorney can also represent you in court as needed.