Business contracts are designed to set forth obligations that require fulfillment by certain parties. Although these agreements are drafted with hopes for successful outcomes, this does not always happen. Circumstances such as financial problems, unforeseen delays, and other unanticipated events can stop or hinder these contracts from being carried out. Breaches occur when a party does not perform according to the contract’s terms, fails to perform within the specified time frame, or does not perform at all.
In legal terms, when one party does not fulfill any of their contractual obligations, this is called a breach of contract. These are categorized as material or immaterial, which pertain to finding the right legal solution for said breach.
Also called a total breach, this is when a breach of contract goes to the basic root of the agreement, damaging and defeating its entire purpose. An example of this could be an individual that agreed to sell a specific house to a buyer. If closing day arrives and the seller has a different house to sell instead, this could qualify as a material breach. The buyer would not have the house they wanted and might need to start the whole process over with another seller. This party may wish to end the agreement and then file court proceedings to collect damages.
Immaterial breaches do not affect the main purpose of the business contract; this is when most of the contract’s specified duties have been fulfilled. If a seller agreed to turn over the house to the buyer on a Wednesday but it was delayed until Thursday, this breach would likely be immaterial.
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In order to build a credible breach of contract case, the first step is to look at the facts. Implied or verbal contracts can be difficult to verify if there is no recorded contract. A plaintiff will need to prove that a contract existed, that is was broken by the other person, that they lost money, and that the defendant was responsible for the loss.
The business contract in question must also be enforceable, and follow a formula showing that one party made the other an offer, which was accepted, and both agreed on compensation or consideration for goods or services to be exchanged. However, some contracts that were never formally executed may still be enforceable in certain cases, though.
Certain contracts have clauses that apply to what will be considered a material breach of contract or may have other pertinent provisions. Taking the time to carefully prepare a business contract before signing it can save a great deal of time, money, and stress if problems arise at a later date.
If a breach of contract does occur, the other party has different options available to remedy the situation. If the contract specified payment for services rendered and the work was not completed, the plaintiff may not have to pay the bill. If the plaintiff suffered monetary damages, they may end up suing the other party to recover their costs.
In other cases, a plaintiff may want to sue the other party to compel performance. For example, if a homeowner signed an agreement with a plumber to repair the pipes but months have passed without the work being done, the homeowner might sue that plumber to fulfill their contractual obligations. Or, if the homeowner is fed up and wants to find a different plumber, they may want to cancel the contract, which makes it void. This could also include getting restitution, or return of any advance payments given to the contractor.
Even the most thorough business contracts can be targeted for breach of contract disputes, but an experienced Los Angeles business attorney at ACTS LAW, LLP can fight to protect your rights. Call us at 833-228-7529 or complete our online form for a free case evaluation today. With office located in Los Angeles and San Diego, California, we serve clients throughout the surrounding areas.
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Boris Treyzon is one of the founding partners of ACTS LAW and serves as the firm’s lead trial attorney. He is widely recognized as one of the top trial lawyers in the nation, as he regularly obtains significant verdicts and settlements in some of the most complex cases ranging from catastrophic personal injury to business litigation to product liability.
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