Lawsuits can be a headache. But occasionally, they are the only means of obtaining what you are legally entitled to. Even though the process may seem daunting, with the proper planning, you can successfully sue someone for a contract breach.
What is a breach of contract?
A contract binds two or more parties to specific obligations, requiring them to take or avoid certain actions with legal enforceability. A “breach” is a failure to perform a contractual promise.
The breach could be anything from a late payment to a more serious violation, such as failing to deliver a promised asset.
There are two types of breaches to consider:
- Minor breach: This is when you don’t receive an item or service by the due date. For example, you agree to MOT a car by the end of the day, but instead, you return the vehicle to the owner two days later. Although you didn’t deliver on the agreed terms, there was no material damage.
- Material breach: Receiving a different item or service than what was agreed. Perhaps you hire someone to paint the walls cream, yet they paint them green. Or, you purchase a new lawn mower but receive a weed trimmer. In these cases, there is a financial loss and material damage.
These breaches can fall into two categories: An actual breach—one party refuses to perform the contract’s terms fully. And an anticipatory breach—where it becomes known in advance that a contractor will not deliver on the terms of the agreement. In this case, you can take legal action immediately instead of waiting for someone to break the contract terms.
When do I take action?
If you entered into a contract and there is a dispute, you may be able to settle it before filing a lawsuit if you can both agree on how to resolve the issue. However, if you do not accept the other side’s offer, you can file a breach of contract case with the court.
For a breach of contract case, some of the issues that come up include:
- Was there a legally binding contract?
- Did the contract clearly define each party’s requirements?
- How did the breach cause damage?
Was there a legally binding contract?
The best way to ensure contracts are legally binding is to follow these basic principles:
Parties must be competent to enter into a contract. For example, a minor or someone with an intellectual disability could not enter into a contract without a guardian.
Make sure it’s in writing—although not impossible, without written recollection of agreements, it’s a case of one person’s word against another, and the terms agreed are very difficult to enforce by law.
All parties involved in the contract must mutually agree, so ensure everyone understands the terms they accept. Have each party sign the written documents to keep a record of acknowledgment.
Did the contract clearly define the requirements for each party?
Courts examine each party’s contractual obligations to determine whether they have fulfilled them. Courts will also assess the contract to determine if any amendments would have led to the alleged breach.
Typically, before starting legal action, the plaintiff—the person claiming that there has been a breach of contract—must inform the defendant that they have violated the agreement.
What damage did the breach cause?
In general, contract law aims to restore the offended party to the same financial situation they would have had without the breach.
Let’s say you are a plumber and agree to fix a kitchen for $10,000, payable on completion. Whether the owner pays you the instant, you bolt the last pipe, or two days later, you will not usually have any damages from the delay. Minor differences from the contract agreement are not usually enough for a lawsuit.
On the other hand, if you completed the kitchen as agreed and the owner never paid you at all, you lost $10,000 worth of time and physical units. This would be considered a material breach—and a good reason to take the defendant to court.
To sum up, if a contractor failed to perform as agreed, and the result was a loss in monetary value, you can file a lawsuit to have the contract enforced or receive financial compensation for their failure to meet the terms. Nevertheless, depending on the terms outlined in your contract and the ability to demonstrate a breach, court cases can get a little tricky. You should always seek legal advice from an experienced contract lawyer for the best results.
Handling a breach of contract doesn’t have to be complicated; we can help you—book a consultation here.
