Below is a list of commonly asked questions relating to breach of contract litigation.
If you need representation in a lawsuit for breach of contract, contact the Lindquist Wood Edwards LLP today.
Q: What do I need to prove to succeed on a breach of contract claim?
A: To succeed on a breach of contract claim, you must establish the following:
- That you had a valid, enforceable contract
- That you are a proper party to sue for the breach
- That you performed your obligations under the contract, tendered performance of your obligations under the contract (were ready and willing to perform), or that you were excused from performing your contractual obligations
- That the party you’re suing breached the contract
- That the party’s breach caused you some injury
Q: How do I prove that I performed my obligations under the contract?
A: You must show that you have at least substantially performed your obligations under the contract. Substantial performance is completed when all the essential elements of a contract were performed.
If you have a question about whether you have substantially performed your obligations under a contract, contact the business contract lawyers at Lindquist Wood Edwards LLP.
Q: What if I did not substantially perform my obligations under the contract?
A: You can still sue for breach of contract if:
- You tendered performance of your obligations.
- You were excused from performing your obligations.
Tendering performance occurs when:
- You were ready and willing to perform your contractual obligations.
- You had the present ability to perform your contractual obligations.
- You notified the other party of your readiness to perform.
Your may be excused from performing your contractual obligations if:
- The other party materially breached the contract.
- The other party repudiates a dependent promise it made.
Q: What is a material breach?
A: A material breach occurs when the other party significantly and substantially fails to perform its contractual obligations. When the other side materially breaches, it may give you, as the non-breaching party, an excuse not to perform your contractual obligations, as well as the right to sue for damages.
However, a contracting party should be wary of ceasing performance based upon the other party’s material breach. If a court decides that the other party did not materially breach the contract, and if you ceased performing based upon an assumption that the other party was in material breach, you may be found to be in material breach yourself.
Before halting performance of your contractual obligations, it is best to speak with a lawyer. If you have a question about whether or not the other party materially breached a contract, contact the business contract lawyers at Lindquist Wood Edwards LLP.
Q: What are my options if the other party has materially breached our contract?
A: If a material breach has occurred, you can either:
- Rescind the contract
- Stop performing your contractual obligations and sue for a total breach of the contract
- Continue performing your obligations and sue for a partial breach
Note On Options 1 And 2
Options 1 and 2 can be risky. If a court finds that the other party’s breach was not a material breach, you may be found to have breached the contract yourself by pursuing these options. Prior to making a decision to rescind or cease performance, you should contact a lawyer that specializes in breach of contract lawsuits.
If you are unsure about which course of action to take, please call the business contract lawyers at the Lindquist Wood Edwards LLP today.
Q: What remedies are available to me in a breach of contract lawsuit?
A: Generally, if successful on a breach of contract claim you can recover actual damages, which can either be economic damages or other damages.
Economic damages are designed to protect three interests:
- An expectation interest
- A reliance interest
- A restitution interest
These are damages that give you the benefit of the bargain and put you in as good a position as you would have been in had the contract been performed.
Reliance interest damages are those which restore any expenditures you made in reliance on the contract.
Usually, these types of damages are sought when your expectation damages are too speculative or uncertain.
You can seek restitution damages to restore property or money taken from you by the breaching party. This puts you in as good a position as you would have been in if no contract had ever been made.
Generally you cannot recover damages for personal injury in a breach of contract claim.
You may be able to recover damages for mental anguish when the anguish:
- Is more than ordinary regret or annoyance
- Was such a necessary and natural result of the breach of contract as to have been within the other party’s contemplation when the contract was made
If you have any questions as to which damages you should seek, or about how to calculate these damages, contact the business contract lawyers at the Lindquist Wood Edwards LLP today.
Q: Can I ever recover exemplary damages?
A: No; in an action for breach of contract, you cannot recover exemplary damages. This is still true even when the other party breached the contract intentionally or maliciously.
However, depending upon the circumstances of your case, you may be able to assert a tort cause of action that would entitle you to exemplary damages.
If you have questions about which damages you can pursue against a breaching party, contact the Lindquist Wood Edwards LLP.
Q: Can I recover liquidated damages?
A: A liquidated damages clause sets the amount of damages for breach in advance. Courts, however, do not always find these clauses valid.
A liquidated damages clause is valid only if:
- The harm caused by the breach is incapable of being estimated, or is very difficult to estimate at the time of the agreement
- The amount of liquidated damages agreed upon is a reasonable forecast of just compensation for the breach
If the court finds that the damages provided for in the contract are more like penalties than they are liquidated damages, the clause may not be upheld as valid.
Q: What is repudiation?
A: Repudiation occurs when a contracting party, without a just excuse, absolutely and unconditionally refuses to perform a contract. The party’s words or actions must show a fixed intent to abandon, renounce and refuse to perform the contract.
Repudiation by a party can occur before that party’s performance is due. This is known as an anticipatory breach.
Repudiation by a party can also occur after party has partially performed its contractual obligations.