Under New York contract law, a breach of contract occurs when one party to a contract fails to perform their contractual obligations under that contract. It is important to note that there are many different types of contract breaches that may occur, including:
- Material Breach of Contract: A material breach of contract occurs when the breach is so substantial that it defeats the fundamental purpose of the contract
- Common elements of a material breach of contract include failure of one party to perform essential contract terms, a substantial deviation from agreed upon performance, or a deprivation of the benefit of the bargain
- Minor Breach of Contract: A minor breach, also called a partial breach, involves technical or minor deviations that don’t fundamentally undermine the contract’s purpose
- For instance, if there is a contract to put oak wood floors in a home, but the contractor puts maple floors in the home, the contract was breached, but the project was still completed and the basic function of the floor is intact
- Importantly, the non-breaching party in the contract may still seek damages
There are many common forms in which a breach can occur, including:
- Failure to Perform: A complete non-performance of obligations, substantial delay in performance, or defective performance will all be considered a failure to perform under the contract
- Anticipatory Repudiation: Anticipatory repudiation occurs when a party explicitly or implicitly indicates they will not perform their obligation under the contract, that then breaches the contract at that point of the communication
- Constructive Breach: A constructive breach happens when one party makes it impossible for the other to perform their obligations
- For instance, if a landlord leases commercial space to a restaurant owner, but then refuses to make necessary repairs to the building’s plumbing system, that makes it impossible for the restaurant to operate according to health codes and is considered a constructive breach of contract
What Should You Do if the Contract Has Been Breached?
If you believe that a party to a contract you are involved in has breached the terms of the agreement, then it is recommended to do the following steps:
- Document the Breach: First, you should gather evidence to support your claim by finding the original contract terms, saving any communications between parties, gathering evidence of the specific actions you believe constitute the breach, and any documents demonstrating financial losses and damages
- Provide Notice: New York courts generally expect the non breaching party to notify the breaching party promptly and detailing the alleged specific breach, and allowing them a reasonable opportunity to cure their breach, if applicable
- Determine Type of Breach: Under New York law, in order to file a lawsuit you must understand what type of breach has occurred, such as a material, minor, or anticipatory breach
- Consider Legal Options: Available remedies for a breach include filing in New York Civil Court (for claims up to $25,000), filing in Supreme Court (for claims over $25,000), or pursuing alternative dispute resolution
- Meet Filing Deadlines: It is important that you promptly take action, as there is a six-year statute of limitations for written contracts, a four year statute of limitations for Uniform Commercial Code (“UCC”) contracts involving goods, or shorter periods if specified in the contract
- Calculate Damages: In your complaint you will need to document your direct financial losses, consequential damages, any mitigation efforts that occurred, and whether or not you are seeking specific performance, etc.
- Seek Legal Counsel: It is recommended to set up a legal consultation in New York with a New York contract lawyer prior to filing a lawsuit as they can evaluate your claim’s strength, assess any potential legal defense that may be raised, help you navigate procedural requirements, and help you maximize your recovery.
How Do I Sue for a Breach of Contract in New York?
Filing a breach of contract lawsuit in New York requires you to understand jurisdictional requirements and procedural rules. The first step in filing a breach of contract lawsuit is determining the appropriate court based on the amount in controversy. In other words, the amount of breach of contract damages and restitution you are seeking will determine the court you file in.
For claims up to $25,000, you can file in New York City Civil Court, while claims exceeding $25,000 should be filed in the New York State Supreme Court. Federal courts may also hear cases, if they involve diversity jurisdiction and claims exceed $75,000.
In order to establish a valid claim, you must prove four essential elements of a contract breach:
- That there was a valid contract
- That you performed your obligations under the contract
- That the defendant breached the contract
- That you suffered measurable damages
Before filing a lawsuit, you should gather all of the above documentation, including the written contract, evidence of breach, proof of any damages you suffered, and all other relevant documents and communications.
You must then provide proper notice to the defendant and allow them reasonable time to cure. The actual filing process involves submitting a summons and complaint, paying court fees, serving the defendant properly, and filing your proof of service.
Your complaint must detail the factual basis for your claim, the legal theory of recovery, specific damages that you are seeking, and your requested relief. A New York lawyer will be able to assist you in drafting a proper complaint and abiding with all state and federal laws, including statute of frauds laws. Once again, there are various different statutes of limitations that require you to promptly file your claim, or you may be barred from later bringing your claim.
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What Are the Penalties for Breach of Contract in New York?
Penalties for a breach of contract in New York will generally be civil in nature. Available remedies most often include monetary damages, specific performance, injunctive relief, and potentially attorney fees if specified in the contract.
As far as success in breach of contract cases, that will typically depend on thorough documentation and strict adherence to procedural requirements. As such, an attorney is generally always worth their fees, as they can ensure that your claim is timely and properly filed and help you maximize your recovery.
What Are Some Defenses for Breach of Contract?
In some cases, a defendant may be able to raise a legal defense which lessens their liability or completely forgives them for their breach of contract. Examples of common legal defenses raised by defendants in breach of contract actions include:
- No Valid Contract: One legal defense is arguing that no valid contract existed due to missing essential elements like offer, acceptance, or consideration
- Capacity Issues: Another legal defense is raising issues about contractual capacity, such as mental incapacity or minority status
- Performance-Based Defenses: These defenses focus on the plaintiff’s conduct, such as their own failure to perform or satisfy conditions precedent
- Impossibility: Defendants may also argue impossibility or impracticability when unforeseen circumstances make performance of the contract impossible
In addition to all of the above, contract validity defenses may also be raised. For instance, fraud, misrepresentation, duress, and undue influence may all serve as legal defenses. These defenses challenge the contract’s enforceability based on how it was formed or obtained.
For instance, material misrepresentations, intentional deception, or coercion during the formation of a contract can invalidate the entire agreement. There are also technical defenses involving timing and procedural issues, such as the six-year statute of limitations for written contracts or four years for UCC contracts.
Do I Need a Lawyer for a Breach of Contract?
If you’re dealing with a breach of contract issue in New York, it’s recommended to consult a New York contract lawyer right away. LegalMatch can help you find and arrange a consultation with a qualified attorney near you that handles breach of contract cases.
A breach of contract lawyer can assist you in understanding New York’s specific contract laws and the types of damages available in your particular case. They will also be able to review your contract to ensure its validity and enforceability.
Additionally, a lawyer can also initiate a breach of contract action on your behalf. Importantly, you may also be entitled to recover your case costs by requesting attorney fees if your contract allows them. Your lawyer will be sure to include a claim for attorney’s fees if applicable. Finally, they can represent you in court, as needed.
