Definition of a Breach of Contract
A legally binding contract occurs when two or more parties agree to enter into an oral or written agreement to exchange mutual performances. For example, Party A promises to provide a service to Party B in exchange for a sum of money. A Breach of Contract occurs when a party fails to perform on their obligation (i.e. Party A fails to provide the service or Party B fails to pay for the service) or when a party interferes with the other party’s performance. A Breach of Contract can give rise to a civil lawsuit and a remedy at law. It is important to understand that a Breach of Contract may be either: 1) “material” where the non-breaching party is allowed to pursue legal remedies for the breach and recover monetary damages, or 2) “minor” or “immaterial” where there is no legal remedy available when there is no financial injury. For example, an auto repair shop (Party A) agrees and promises to have repairs done to Party B’s car by 8:00 a.m. on Saturday, but the repairs are not done until 9:00 a.m. on Saturday. The failure to deliver the car on time is technically a Breach of Contract, but it did not result in any financial injury to Party B, therefore a legal remedy for the minor breach is not available. A civil Breach of Contract cause of action is available when one party fails to meet their contractual obligations. The non-breaching party may pursue a civil remedy to require the other party to perform, or to seek monetary damages for the breaching party’s non-performance. The ideal party to pursue a Breach of Contract cause of action is a party who has fully performed their obligations under the contract, and has had a financial loss due to the non-performance by the breaching party.
The remedies for Breach of Contract may include one or more of the of the following:
- Compensatory damages - the direct financial loss as a result of the breach. (i.e. Landlord recovers $ 3,000 for unpaid rents from a tenant who has failed on their obligation to pay rent)
- Consequential damages - additional damages that are foreseeable. (i.e. Tenant recovers $1,500 damages for money paid to movers after their landlord breaches their lease agreement and wrongfully evict them)
- Liquidated damages - a specific amount of damages stated in a contract between the parties that they agree will be owed to the non-breaching party in the event of a breach. (often seen in real estate purchase agreements)
- Attorney’s fees - when the terms of the contract provides for attorney’s fees or there is a law that provides for attorney fees.
- Expectation damages - damages awarded after a breach that are intended to compensate the loss of future income caused by the breach.
- Reliance damages - money damages that are awarded to a non-breaching party for the losses suffered due to reasonable reliance on the breaching party’s promise to perform.
- Specific performance - in situations where monetary damages will not make the non-breaching party whole, a court may order the breaching party to perform their obligation under the contract. (common in real estate sales contracts since real estate is considered unique)
Why work with Key Counsel P.C. Law Firm for this service?
Key Counsel, P.C. promises to provide quality legal advice when clients engage our services for Breach of Contract causes of action. Although no law firm can legally promise or guarantee a particular outcome in any potential litigation, Key Counsel, P.C. can promise that we work hard to get you the best possible outcome for your matter.
Breach of Contract cases can be complicated and difficult to litigate, Key Counsel, P.C. will provide an experienced civil attorney to help you every step of the way. We are experienced in both defending and prosecuting Breach of Contract claims. Key Counsel, P.C. has successfully resolved countless matters to the satisfaction of our clients. We use the law to protect your rights and our experience to preserve your assets.
If you have had an oral or written agreement breached by another party, or if you have been accused of breaching an agreement with another party, call Key Counsel, P.C. now! We will provide a free no obligation consultation with an experienced civil attorney to evaluate your rights and options.