A contract is a legally enforceable agreement that creates rights and obligations on the part of each party involved. A valid contract contains an offer, acceptance, consideration (compensation), and mutuality, aka a “meeting of the minds”. If either party fails to abide by the terms of the contract, a breach may exist. Oftentimes, we create contracts without giving them a second thought. So, when we’re sued, we don’t always recognize the claim as a breach of contract claim. Would you handle your case differently if you knew?
To help you make the best decision on contract cases, we’ll take a closer look at the concept of “breach of contract”.
Breaches of Contract
Breaches of contract, like most everything in the law, come with “what-ifs” that determine which appellate cases are relevant.
Material Breaches – Material breaches occur when one or both parties fail to fulfill their contractual obligations. Of course, this has to be proven, but there are statutes and appellate cases to help prove or disprove a material breach of contract.
Minor or Immaterial Breaches – Immaterial breaches occur when the terms of the contract have been fulfilled but there’s still a disagreement. There are many appellate cases that show minor breaches in context.
Disputes – Disputes are classified based on whether the event is an actual/fundamental breach or an anticipatory breach. Actual/fundamental events have already occurred, An anticipatory occurs when the plaintiff knows that the defendant cannot or will not live up to their side of the agreement.
Types of Breach of Contract Cases
Contracts, especially the written ones, set out the specifications and requirements for projects, loans, mortgages, leases, etc. Below are examples of claim types that are breaches of contract.
A breach of contract is the primary cause of action in debt-collection lawsuits. If one party fails to pay back a debt to the other as agreed, the other party can sue for failure to pay a debt. If the case is successful, the plaintiff may garnish wages or seize property to recover losses.
Foreclosure and Wrongful Foreclosure
Foreclosure cases involve a type of contract, a mortgage. If a homeowner doesn’t pay on a house according to the terms of the mortgage, the lender can file a foreclosure claim. In most cases, banks provide an Official Notice of Foreclosure before filing a lawsuit. Rules for resolving these disputes vary depending on whether your state follows a judicial or nonjudicial foreclosure process.
Landlord-tenant disputes are often breach of contract claims, especially when the issue relates to the terms of the lease or rental agreement. If a tenant doesn’t honor the terms of the lease, the landlord can file an eviction claim.
Elements of Proof in a Breach of Contract Case
To prove the typical breach of contract claim, the plaintiff must show that a valid contract existed, the plaintiff lived up to their side of the agreement, the defendant breached the agreement, and the plaintiff experienced damages as a direct result.
Defending Against a Breach of Contract Claim
The plaintiff must show that a valid contract existed. Contracts may be invalid or unenforceable for a variety of reasons. Here are a few of the most common defenses to a breach of contract lawsuit.
Pressure – Businesses may use unfair tactics to pressure consumers into contracts.
Lack of Capacity – One or both parties did not have the capacity to sign the contract. The party may be too young, not of sound mind, or lacks the authority to represent a party.
Impossibility – If you’re unable to live up to your side of the agreement due to unforeseen circumstances, this may be a valid defense.
Illegality – Language within a contract may make it illegal or unconscionable to enforce. This is common when a clause in the contract violates a law, industry-standard, or public policy.
Mistakes – Unilateral or mutual mistakes may prevent parties from fulfilling a contract.
Waivers – Consumers occasionally waive their right to sue verbally, by action, or by agreeing to a waiver clause.
Contract law varies widely; numerous issues may arise during the creation, performance, or even completion of a contract. If you recognize the possible issues ahead of time, you just might be able to better manage or defend against a contract case.