What is a Breach of Contract?
In any form of business, there formal agreements written up that are in the form of a binding contract so that there is an understanding of responsibilities and duties. These contracts are typically written up before the company even gets its start to ensure that everything is handled with honesty and in accordance with legal standards. When one party within the contract fails to comply with the arrangement, reveals that he or she has no intention of keeping with the standards set forth or is simply not able to comply, then they are breaching that contract.
There is almost nothing more frustrating in business, or potentially devastating, than a breach of contract. The subject of contracts in business has become ever more complicated, as you may already be aware. A slight change in the wording of a particular part of a binding contract can cause radical shifts of liability or responsibility. It is essential for any business to have trusted legal counsel review all contracts before signing them or presenting these documents. If your business is facing legal trouble related to breach of contract issues, please do not hesitate to call our firm as soon as possible and speak with a Los Angeles business litigation attorney about your situation. The faster you act to attain skilled legal counsel, the closer you will be to a resolution of the problem.
TYPES OF CONTRACT ISSUES
There are four major types of breaches that can occur with varying degrees of severity. They include:Minor breachMaterial breachFundamental breachAnticipatory breachA partial breach, referred to as a minor breach, states that the non-breaching party can only sue for actual damages, not for specific performances given. For example if a contractor uses a different brand of tile than agreed upon in a remodel but it looks and acts exactly the same, the homeowner cannot claim a minor breach since the change in contract is not causing physical damage.
In situations of a material breach, the breach is much more substantial and can allow for the party experiencing loss to sue for damages. Going back to the example of the contractor example, if the tile that the contractor used was a really fragile material and began cracking right away, the homeowner could pursue compensation. This would entail either collecting financial help to replace the tiles or restitution for the loss in value of their house.
Breaches that are even more significant are called repudiatory or fundamental breaches. They so drastically affect the situation that they can allow for the non-breaching individual to sue for damages as well as being allowed to end the terms of the initial contract. If the tile that the contractor put in the family's home reacted strangely with their countertop and caused a mold to grow throughout their home, this would be considered fundamental. Not only did the breach in contract breach their terms of agreement, it has cause significant damage and health concerns.
Anticipatory breaches allow for the non-breaching party to look at broken contract situations as immediate and allow for them to sue for damages before the service is even completed. For instance, if the contractor remodeling a home stops answering calls from the homeowner after the tile incident and has damaged their entire kitchen already, the homeowner can make the breach of contract immediate. Even if they had assigned the contractor to remodel their entire living room next, they can break their agreement based upon the damage caused.
Statute of Limitations in Breach of Contract Claims
A statute of limitations is the deadline that someone has for filing a lawsuit. This means that once the statute of limitations has expired, then the person can no longer file a claim. In Hawaii, the period of time that one has to file a claim varies depending upon the type of claim. For breach of contract claims, a person has six years from the date the contract was broken to file a claim with the court.
If you have upheld your end of the agreement and the other party has either only partially fulfilled their duty, or if they have made it clear that they do not intend to keep their end of the agreement, then you should contact our Firm at once to discuss your legal remedies. We understand that time is money, and that contract breaches can dramatically impact your bottom line; therefore, we urge you to look into your options so that the situation can be resolved as quickly and as cost-effectively as possible.
Assistance in Reaching Resolution
Mediation is almost always the best and most expedient way to resolve business disputes. Unfortunately, it does not always effectively end the problem. Arbitration is another option of alternative dispute resolution. If you have not tried either of these options, our firm would be happy to review your situation with you. We would evaluate and advise you on the most ideal strategy for your unique circumstances.
If neither of these is advisable or if they have failed, litigation is probably the answer. We are experienced and skilled litigators and have helped many of our clients achieve successful outcomes through business litigation. A breach of contract lawsuit can provide remedies. These can be in the form of compensation for financial damages, remedies to address specific performance, or cancellation of a contract or restitution.
The remedy of providing financial damages includes giving payment in some form to the non-breaching party. This is the most commonly form of remedy, and can allow the business to move forward without the impediment or loss. Specific performance refers to a performance of duty to the breaching party that is ordered by the court. It is usually used when damages will not suffice. Cancellation of the contract and restitution to the non-breaching party to the condition prior to the breach is also a fair solution.
Our firm can evaluate your individual contract issue and advise you on what the best course of action is for your particular situation. Call today to schedule a free consultation! 808-465-2500