Breach of contract is likely the most common claim alleged in civil litigation cases. Contracts are the glue that holds our society together and we all enter into agreements (i.e. contracts) in one form or another on a daily basis. When the breach of that agreement results in injury, many look to the court system for a remedy.
Here are a couple of the more memorable recent breach of contract cases include:
- Bill Cosby filed a breach of contract lawsuit against a woman who accused him of sexual misconduct, her mother, her lawyers, and the publisher of the National Enquirer. The lawsuit claims that they “disclosed information that they promised to keep secret” in return for a financial settlement.
- Donald Trump sued Jose Andres’s organization for breach of contract after the celebrity chef canceled his plans to open a restaurant in a Trump group building after Donald Trump’s comments on immigration.
What is a contract?
Simply said, “A contract is an agreement to do or not do a certain thing.” (Cal. Civ. Code § 1549.)
The essential elements (parts) of a contract are:
- Parties capable of making a contract;
- Their consent;
- A lawful object; and,
- A sufficient cause or consideration in exchange for the promise. (Cal. Civ. Code § 1550.)
Are there different forms of contracts?
Although we often think of contracts as written documents signed by all parties to the agreement, contracts exist in different forms.
Contracts may be in writing, they may be oral agreements, or they may be implied from the parties’ conduct.
However, it is significantly more difficult to prove the 4 essential elements of a contract when the contract is oral or implied. That is why it is imperative that before entering into any significant agreement, you should seek the assistance of a competent attorney to draft and/or review the terms of the agreement.
How do you establish breach of contract?
In California, in order to prevail on a cause of action for breach of contract, the plaintiff must prove all of the following:
- The existence of a valid contract (See above);
- The plaintiff’s performance of the contract or excuse from nonperformance;
- Defendant’s breach (failure to perform a material part of the contract); and
- Resulting damage to plaintiff. Richman v. Hartley (2014) 224 Cal.App.4th 1186.
What can plaintiff recover on a breach of contract claim?
Damages awarded to an injured party for breach of contract “seek to approximate the agreed-upon performance.” Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515. In other words, the law will seek to put plaintiff in the position s/he would have been if the defendant did not breach the contract. This means that plaintiff’s award cannot exceed what s/he would have received if the contract had been fully performed on both sides. (Cal. Civ. Code § 3358.)
There are two types of contractual damages that a plaintiff could recover: general damages (damages that are a natural result of a breach) and special damages (losses resulting from the special circumstances of the particular contract). Regardless of whether the damages are general or special, the resulting injury to the plaintiff (translated into dollars) must have a causal connection to the defendant’s breach and must be reasonably foreseeable.
What is the procedure for filing a lawsuit for breach of contract in California?
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