What Is the Proper Court for a Breach of Contract Lawsuit?

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 How Do I File a Breach of Contract Lawsuit?

A contract is a legal agreement between two parties in which one party makes an offer (“I’ll sell you my car for $15,000”), and the other accepts it (“That sounds good.”) Both parties are now required to fulfill their promises. A contract may be oral or written, and its provisions may be expressed or implied.

A breach of contract occurs when one party to a contract fails to perform as promised in the agreement, and the other party suffers economic loss as a result. A party’s failure to perform as promised is a “breach.” If one party violates the contract, the other party will suffer economic losses. For example, if you gave the car keys to the person who said they would buy your car but never paid, you would suffer financial loss because they failed to keep their end of the deal.

You can file a lawsuit to recover your damages. You begin by filing a complaint in the appropriate civil court. A complaint is a technical legal document that describes the problem and explains the case to the judge and the other party. The complaint must then be served, i.e., delivered to the defendant. The defendant then has 30 days to file their answer to the complaint. With the complaint and answer, the lawsuit is underway.

The question of where to file a complaint can be more complex. When deciding where to file a lawsuit for the breach of a contract, the following are some of the factors that should be taken into consideration:

  • Venue: You cannot make a defendant answer a lawsuit in just any location that you choose. The defendant must have some connection that justifies a court exercising authority over them. “Venue” means the proper location for the case. The venue for a breach of contract lawsuit is in a city or county with the legal authority to hear the lawsuit. The venue is based on where most of the events leading to the lawsuit occurred. The venue can also be located in the place where the defendant is located
  • Jurisdiction: The court in which you file must have jurisdiction over the subject matter, i.e., breach of contract – some courts, such as family law (divorce) courts, do not hear breach of contract cases), the amount in controversy (for example, small claims courts are limited in the amount of money that can be sought), and the parties (jurisdiction is discussed further below)
  • Forum Selection Clause: The contract itself may identify the court where a lawsuit should be brought. In addition, the contract may provide the state or even nation whose laws should apply to the resolution of the dispute
    Statute of Limitations: The statute of limitations refers to the period after the breach of a contract within which an action for the breach must be brought. Every state has its own statute of limitations for breach of contract cases. Six years is a typical length of time
  • Mediation: Sometimes, a contract provides that the parties should not file lawsuits in a court in case of a breach but should use an “alternative dispute resolution method” (ADR) to resolve their issues—for example, mediation or arbitration.

Where Can I File a Breach of Contract Lawsuit?

A person may file a claim for breach of contract in any court with proper venue and jurisdiction unless the contract states where the claim should be filed.

Generally, any civil court of general jurisdiction would have jurisdiction over a lawsuit alleging breach of contract. Although you can file a lawsuit in several different courts, the laws of certain jurisdictions may be more advantageous than others. Knowing whether one jurisdiction would be better could affect the case outcome. It is a good idea to speak with an attorney to learn where would be the best place for you to file.

You may file a lawsuit in any court that has one of the following connections to the claim:

  • The state in which the defendant lives. In the case of a business, its residence is its principal place of business
  • Any state in which the court has some legal basis for exercising authority over the defendant, e.g., the state where the defendant is engaged in business
  • The state in which the contract was negotiated or signed
  • A federal court if the breach of contract lawsuit is based on an issue of federal law
  • A federal court, if the parties to the contract are citizens of different states and the amount in controversy is likely to exceed $75,000

In addition to the issue of jurisdiction over the parties and the controversy, you must file a breach of contract lawsuit in a court with jurisdiction over the amount in controversy. The amount in controversy is the dollar value of the damages in the case. Every state has its own amount-in-controversy requirements for the courts of the state. Most states have several different levels of trial courts, each with its own amount-in-controversy requirements.

What Are Some Possible Defenses to a Breach of Contract Claim?

A wide variety of defenses are available if a party is sued for breach of contract. Some of the most common defenses are listed below.

  • Statute of Frauds violation: The Statute of Frauds requires that certain agreements be in writing if they are to be enforceable in a court of law. For example, all contracts for the land sale must be in writing and signed by both parties.
  • Elements of a Contract: A defendant may claim that there is no contract because the person suing for the breach has not proven all the elements of a contract. A person who wants to enforce a contract must prove all of the elements of a valid contract as follows:
    • Offer: One of the parties to a contract must have made a valid offer. The offer must be sufficiently definite in its terms, including such items as quantity; if goods are involved, price, quality, and the place and time of delivery
    • Acceptance: The other party must communicate their acceptance of the offer or communicate a valid counteroffer
    • Consideration: For a valid contract to be formed, the parties must exchange consideration or something of value. Often one party pays the other for some performance per the terms of the contract
    • Performance: The person seeking to enforce the contract must prove that they performed their obligation under the contract and that the other party failed to perform as they promised
    • Economic Loss: The party suing for breach of contract must prove that they suffered a measurable economic loss.

If all of the elements of a claim for breach of contract are not proven, the lawsuit will not succeed.

  • Unconscionable contract: An unconscionable contract is a contract that is so severely one-sided and unfair to one of the parties that it is deemed unenforceable under the law. Unconscionability in contract law means that the contract leaves one of the parties with no real, meaningful choice, typically due to significant differences in bargaining power between the parties to the contract.
  • A defendant may also claim that the contract terms were unconscionable. An unconscionable contract is one whose terms are so unequal as to be against public policy. If one party has more power in the deal and uses that power to make the terms of the contract obviously unfair to the other, then the defendant may assert that the contract is invalid.

Should I Get a Lawyer If I Want to File a Breach of Contract Lawsuit?

Determining where, when, and how to file a claim for breach of contract can be challenging in civil law. There are several factors to consider when deciding how and where to file a breach of contract case. In some cases, it is obvious which court is the right, but in others, it can require real analysis.

You would be well advised to consult an experienced contract lawyer. An experienced contract lawyer can help you assess your case and determine the most favorable court in which to file.


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