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Back to the Basics - Valid Contracts and Breaches

breach of contract.jpgWhen two or more parties enter into a legally binding contract, they are stating that they will agree to the terms listed therein. What happens when one party does not abide by the terms of the agreement? The ramifications of a breach of contract suit in California can be costly for both parties.

What is a Contract?

A contract is a legally enforceable agreement between two or more parties. In order for a contract to be legally binding, the agreement must have the following elements:

  • Offer: An offer is one of the four essential elements of a contract. An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it;
  • Acceptance: Acceptance is one of the four essential elements of a contract. There are several forms of acceptance, including acceptance by performance and acceptance by promise. Acceptance by performance is made when the offeree renders the performance required in the contract. Acceptance by promise is made when the offeree promises to render the performance required in the contract at a later date;
  • Legal Purpose: The objective of the contract is only enforceable if it complies with the laws of the land and public policy;
  • Meeting of the Minds: Also known as mutuality of obligation, which refers to the parties' mutual understanding that the parties agree to the same thing, in the same sense at the same time;
  • Certainty of Subject Matter: A contract is only legally binding if each party fully understands the terms of the parties' obligations, and, if the terms are sufficiently defined so that a court may ascertain the parties' obligations under the contract;
  • Consideration: Consideration is one of the four essential elements of a contract. Consideration is consistent of either a benefit to the offeree or the detriment of the offeror; and
  • Competent Parties: Competency is the last of the four essential elements of a contract. In order for a contract to be legally binding, all parties to the contract must be of sound mind and body, and, must be of the age of maturity to enter into a legally binding contract.

Breach of Contract

A breach of contract occurs when there is a violation of a contractual obligation. There are several ways to facilitate a breach of contract claim, which depend on what is stated in the contract itself, usually arbitration or via civil action. If the contract states that any breach of contract claim must be arbitrated, it means that the investigation and determination of the matters of difference between the parties will be decided by one or more persons mutually agreed upon by the parties. If the contract states that any breach of contract claim must be argued in a civil court, it means that a personal action is initiated in a local district or superior court, or, if the damages are above a certain amount, federal court. Breach of contract claims can be very costly for all parties involved in the claim.

Get Legal Help

If you are considering bringing a breach of contract claim, there are many factors you must consider. You need to understand your options, and your obligations under the contract. You will need the help of the experienced San Jose business litigation attorneys at Diemer, Whitman, & Cardosi, LLP. We can walk you through the entire process and answer all of your questions. Call us today at (408) 971-6270 for help in Santa Clara, New Almaden Los Gatos, and other nearby communities.



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