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Understanding Contract Disputes and Breach of Contract Claims

business-contract.jpgToday, a majority of businesses rely on contracts to fulfill their day-to-day operations. When you sign a contract with another business or individual, you expect them to perform their end of the bargain or agreement. When a party fails to fulfill their end of the bargain or breaches the agreement, your business can quickly run into financial trouble, losing a significant amount of profit, time and resources.

Contract breaches can occur in a variety of cases aside from a party failing to fulfill their end of the bargain. Sometimes, the dispute occurs due to the meaning of the terms of the contract or unexpected circumstances. It is important to remember that if a breach occurs, you need to act quickly to preserve your rights. Under California law, depending on the type of contract involved, you either have two or four years to file a lawsuit to recover your damages. Written contract claims have to be brought within four years after the breach. On the other hand, oral contract claims must be brought two years after the breach.

If you or your business entered into contract with another party that failed to fulfill their end of the agreement, you should contact an experienced business attorney to advocate on your behalf and get you the compensation you deserve.

Breach of Contract Case

In order to prevail in a breach of contract case, you essentially need to prove:

  1. That a contract existed (written or oral) between you and the defendant;

  2. That defendant breached that contract; and

  3. That you suffered damages or losses as a result of the breach.

Existence of An Enforceable Contract

A contract is valid when each party makes a promise, and usually, one party receives a benefit while the other receives a detriment. In order for the contract to be enforceable, you need to establish three main elements, which are offer, acceptance, and consideration.

Types of Breaches

Generally, a breach arises when either of the parties breaks a contractual promise. However, not every breach permits recovery in a court of law. Only when the breach diminishes value from you, the non-breaching party, can a lawsuit be brought.

There are four common types of breaches that occur in contract disputes:

  • First, a material breach occurs when the defendant fails to perform its duties under the contract;

  • Second, a fundamental breach occurs when the defendant does not follow through with the underlying basis of the contract;

  • Third, an anticipatory breach occurs when the defendant clearly informs you that it is not going to perform their duties under the contract; and

  • Fourth, minor breaches occur when the defendant commits errors while performing its duty under the contract, but generally completes performance.

Recovering Damages

In order to recover damages under California law, you need to show the nature and origins of your damages, meaning they must be clearly ascertainable. An award of damages under contract law is to compensate you, the aggrieved party, for all the detriment you suffered as a result of the defendant's breach. These damages are usually the amount of money based on the terms of the contract, plus interest. In certain cases, you might be entitled to liquidated or punitive damages and even attorney's fees.

Consult an Attorney

Pursuing a contract claim on your own can be very difficult. You should contact an experienced San Jose business litigation attorney who will evaluate your case, preserve your rights, and get you the compensation you deserve. 

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