In Michigan, when someone is successful in their breach of contract claim against another party, they might be able to recover monetary damages or be awarded a different type of remedy in accordance with Michigan contract laws. The person who filed the claim, however, will have to prove all of the elements that are required to show a contract was breached, including showing that a valid contract existed.
The specific definition of what constitutes a valid legal contract can be different in each state, making it important to reach out to a Michigan lawyer for more information. In general, a contract is a document that outlines the agreements between private parties.
Contracts create mutual obligations between the parties involved and give the parties certain legal rights. Contracts can be oral or written. However, an oral contract is often more difficult to enforce than a written contract.
It is important to note that the majority of contracts have to be in writing to be valid.
What Is a Breach of Contract
Breaches of contract happen when someone does not complete their duties or obligations under the terms of the contract agreement. Contracts usually outline what the parties involved are required to do and how to do so in order to hold up their part of the contract.
When someone involved in a contract does not follow its terms, they are considered to be in breach of that contract. When this happens, the non-breaching party may be able to file a civil claim against the party that breached the contract to be compensated for the harm they suffered.
How Can Contract Breaches Happen
Breach of contracts can happen in a variety of ways, including partial breaches and complete breaches. A breach of a contract may also be a minor breach or a substantial breach.
Determining the type of breach that occurred helps figure out what damages for breach of contract may be available. In general, a party to a contract can be liable for breaching the contract in one of three main ways:
- Anticipatory Breach: This breach may also be called an anticipatory repudiation. It can happen when the party breaching the contract tells the other party they will not or cannot fulfill their obligations.
- After the non-breaching party finds out that this will happen, they can file a breach of contract claim.
- Minor Breach: Minor breaches happen when one of the parties does not complete a small detail in the contract. In these situations, the whole contract has not been violated and can still be performed.
- Minor breaches can include typographical errors, incorrect prices, and incorrect dates.
- Material or Fundamental Breach: Material or fundamental breaches are the most common breaches that create breach of contract lawsuits. When these types of breaches happen, they render performance by the other party to the contract impossible.
Contracts can also be violated in other ways, such as if the contract was fraudulent, was illegally formed, was unconscionable, or included a mistake of fact in its terms.
Damages
When a breach of contract claim is made, a plaintiff usually asks for compensatory damages. Compensatory damages compensate the party who did not breach the contract for any financial losses they suffered because of the breach.
This category of damages can include general damages and specific damages. General damages are meant to compensate for losses that were directly related to the subject matter of the contract.
Specific damages are meant to compensate the party that did not breach the contract for the losses that were not a direct result of the breach, for example, damage to a party’s reputation.
Other types of damages may also be available in breach of contract claims, including:
- Remedies in Equity: Equity remedies are different from legal ones because they are not money.
- Restitutional Damages: Restitution is intended to restore the non-breaching party to the position they were in before a breach happened. This may include money that was deposited or put forward in a contract.
- Nominal damages: This is a symbolic type of damages that are provided when no true harm was caused by the breach. This remedy is based on contract principles and may be as low as one dollar.
- Quantum Meruit: This phrase means, “what one has earned,” in Latin. These damages are meant to compensate for the reasonable value of the services that were performed by one of the parties for the other.
Statute of Limitations for Breach of Contract in Michigan
In Michigan, there is a general statute of limitations for a breach of contract that is six years. However, this length may be longer or shorter depending on the type of contract.
A contract for sale has a four-year limit. For specific bonds or instruments, there is a ten-year limit.
For more information on the specific statute of limitations that will apply to the contract involved, it is essential to schedule a Michigan lawyer consultation.
