Breach of Contract
LOS ANGELES BREACH OF CONTRACT ATTORNEYS
Contracts form the backbone of business relationships. When someone files a breach of contract lawsuit, something has seriously gone wrong in a business relationship. People do not hire attorneys over minor disputes or insignificant violations of contract provisions.
At Lesowitz Gebelin LLP, our founding partners are graduates of Harvard Law School and the NYU School of Law, and they have significant experience litigating a wide variety of breach of contract disputes. Our law firm represents both plaintiffs attempting to enforce their contract rights as well as defendants who have been accused of breaching their agreements.
On this page we provide certain key information on California law relating to breach of contract lawsuits. This is not meant to be a thorough restatement of contract law. The body of contract law that a court in California today may consider is massive. Contract law has developed for hundreds of years with many of its foundations dating back hundreds of years to English law. Largely through individual court decisions, now covering multiple centuries, contract law has grown, developed, and adapted to significant changes in society, business, and technology. We have spent a great amount of time both inside and outside our practical legal practice (with apologies to our families) studying and writing on contract law.
What Constitutes a Breach of Contract?
A plaintiff who sues a defendant for breach of contract in California must prove each of fourth things:
- the existence of a contract,
- that the plaintiff has complied with the contract or has grounds to not to have complied with the contract,
- that the defendant breached the contract, and
- plaintiff suffered damages caused by the breach.
As for the existence of a contract, for there to be an enforceable contract:
- The parties must have agreed to the terms of the agreement.
At times acceptance can occur through taking actions that implicitly indicate acceptance of the terms. Examples of this could be by performing actions consistent with accepting the agreement or by accepting the benefits offered under a proposed contract.
- The parties must have agreed to give each other something of value
This can include a promise not to do something. However, an agreement to make a gift in the future is usually not an enforceable contract and can be voided so long as there has not been detrimental reliance.
- The terms of the agreement must be sufficiently clear so that the parties understand what they each are required to do under the agreement.
So long as the essential terms are agreed to, not every possible term must be addressed or agreed to by the parties. For any terms that are not specifically addressed by the parties, in a breach of contract lawsuit, courts will generally supply the missing terms. Courts will use a variety of methods to determine what the missing terms should be including industry custom, what would be reasonable under the circumstances, how the parties have acted in carrying out the contract, as well as other factors.
Note that, with certain notable exceptions, contracts may be oral.
As for the requirement that the plaintiff not be in breach in order to sue the defendant for breach of contract, generally a plaintiff’s insignificant breach will not bar the plaintiff’s claim. Generally, only a “material” breach will bar a plaintiff’s breach of contract claim. Furthermore, if the plaintiff’s breach is unrelated to the defendant’s breach, the plaintiff’s breach may very well not affect the plaintiff’s ability to pursue a breach of contract claim.
There are many possible defenses to a breach of contract lawsuit. Here we highlight a few notable defenses.
One possible defense is that the plaintiff waived any deficiencies in performance. The waiver need not always be explicit. At times, accepting defective performance, especially without complaint, may constitute a waiver to sue for past breaches. (The waiver will not necessarily waive similar defective performance in the future.) Similarly, the conduct of the parties may indicate that they have modified their agreement, even if they never formally agreed to a modification.
Also, there are various defenses when enforcement would be particularly unfair. For example, there could have been an unacceptable amount of duress placed upon the allegedly breaching party. Especially for certain types of consumer contracts, a court could find the terms to be unconscionable. A court may not enforce a contract because it was induced by fraud. There are other examples as well.
Performance may also be excused because of conditions that make performance impossible. Developments outside of the defendant’s control may so frustrate the purpose of the agreement (especially if caused by the plaintiff) that performance may be excused. One should most certainly consult with a lawyer if contemplating breaking a contract on one of these grounds.
While often not a complete defense, someone who is the victim of a breach of contract must make reasonable attempts to mitigate the damages. For example, if an employee is fired in violation of an employment contract, generally the terminated employee cannot simply choose not to work and collect full damages even though perfectly good employment would have been available elsewhere.
Damages and Remedies for Breach of Contract
The goal of monetary damages in a breach of contract lawsuit is not to punish the defendant for breach. Therefore, punitive damages are typically unavailable for breaching a contract. (Depending on the case, there could be other claims besides breach of contract that justify punitive damages.)
The primary goal of monetary damages in breach of contract cases is to put the plaintiff in as good of a position he, she, or it would have been in had the defendant performed as promised. The plaintiff is not supposed to end up in a better position than if the defendant had performed as promised. This means that there are times when the defendant may end up profiting from the decision to breach the agreement even if the defendant pays the full liability called for under the law.
How to calculate damages in a case can vary widely. Sometimes damages are easy to calculate. Other times expert witnesses may be required.
A very simple damages example would be if I promised to sell you a product for $100,000, and I delivered you the product, and then you did not pay me. My damages would be $100,000 plus perhaps other costs I incur such as shipping.
A less simple, but still straightforward example, would be if I promised to sell you a product for $100,000, and you cancel the order before I incurred any costs. If I can show that after all my costs, I would have made a $25,000 profit had you not cancelled the order and paid in full, my damages would be $25,000.
Damages from a breach of contract may be too remote or too unforeseeable to receive compensation. Similarly, damages may be too speculative. One well-known example of this is that often damages are not allowed for lost profits from an entirely new business that would have been launched if not for the breach of contract.
Generally, in the case of ordinary business contracts, damages for emotional distress are not allowed.
The above is merely a broad overview of certain topics relating to breach of contract law. Once again, contract law is one of the broadest areas of law. It is important to consult a high-quality attorney well-versed in the law.
Contact Us About Your Breach of Contract Litigation
Our offices are located within Los Angeles County, California. We represent clients throughout California, including Santa Monica, Culver City, Torrance, Long Beach, Orange County, Riverside, San Diego, Santa Barbara, San Bernardino, Ventura, and from Silicon Beach to Silicon Valley.
Lesowitz Gebelin LLP’s litigation attorneys can help you handle your breach of contract business litigation dispute. We invite you to contact us about your Breach of Contract matter and either submit to us using our online case submission form or by calling us directly at 310-341-3072.