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07 . 15 | General Law

What is Breach of Contract in California?

It goes without saying that a broken promise is never a good thing. In general, it leads to hurt feelings, anger and resentment. It ruins trust, wrecks personal and professional relationships and sometimes results in financial losses, too.

Luckily, you may be able to pursue legal recourse if a promise made in a written or oral contract isn’t honored. In this article, the Los Angeles business attorneys from the Law Office of Parag L. Amin P.C., explain what a breach of contract is, different types of breach of contract, what must be proven to win a breach of contract case, and how long you have to initiate a breach of contract lawsuit in California.

Breach of contract – a simple definition

Legally, breach of contract is defined as a situation occurring when:  someone involved in a formal written or oral agreement (contract) fails to abide by one or more terms without lawful reason.

A business or individual may breach a contract by:

  • Failing to finish a job
  • Failing to make full payment for services rendered/work completed
  • Failing to make one or more payments by specified deadlines
  • Failing to deliver all goods or services
  • Delivering goods or services other than those specified
  • Delivering substandard goods or services
  • Failing to provide a bond as required
  • Failing to meet specified deadlines for delivery of goods or services without acceptable cause
  • Failing to abide by any other relevant terms

Different types of breach of contract

 In any conversation about Los Angeles breach of contract, it is important to understand that this is a general term. In fact, as our breach of contract lawyers know all too well, there are several types. These are partial or immaterial breach of contract, material breach of contract, and anticipatory breach of contract.

With that being stated, let’s take a closer look at each type.

Partial or immaterial breach of contract – occurs when the violation of contractual terms is relatively minor. In other words, a partial or immaterial breach of contract is not so significant that it renders the contract worthless.  

Let’s say, for instance, that you receive a product or service other than the one specified in the contract. But the quality and price are similar to the original product or service, and any other differences are negligible. This would likely be considered a partial or immaterial breach of contract. While you could technically sue someone for this type of breach of contract, there really wouldn’t be any point, since you haven’t incurred actual financial losses or damages.

A material breach of contract – occurs when the violation of contractual terms is so egregious that it renders the contract worthless.

As an example, let’s say you received a different product or service than the one specified in the contract. You subsequently learn that it is vastly inferior than the one provided for in the contract, or is not designed for use in the application. In this case, you may be able to sue for any actual damages incurred.

Lastly, an anticipatory breach of contract – occurs when a business or individual demonstrates through their/its actions (or lack thereof) that they have no intention of honoring the agreement.

Consider the following scenario.  On January 1st, “Person A” agrees to buy a puppy from “Breeder B.” Their agreement is documented in writing. As part of this agreement, “Breeder B” requires a $2,500 deposit at the time of signing, and another payment on March 1st, with final payment due when the puppy is ready to go to its new home. “Person A” pays the deposit, but notifies “Breeder B” on February 15th that he will be unable to make the next payment by March 1st as contractually required.

Based on this turn of events, “Breeder B” could reasonably assume “Person A” is in anticipatory breach of contract. This means that “Breeder B” could sell the puppy to someone else, or potentially sue “Person A” for breach o f contract.

How to win a California breach of contract case

To prevail in this type of case, our California breach of contract attorneys must prove that:

  1. A valid contract existed.
  2. You (as the plaintiff) fulfilled your end of the bargain, or had a legally acceptable reason not to do so (if you failed to do so).
  3. The defendant breached the contract through his/her/its specific acts or conduct, negligent performance or failure to act/perform.
  4. That you (as the plaintiff) incurred “measurable losses” due to the breach of contract.

What is a valid contract?

Clearly, one of the most – if not the most – element here is the existence of a valid contract. Legally, a written or oral contract is not valid unless it meets all of the following criteria.

First, there must be an offer. This means that the parties involved engaged in some sort of discussion and reached consensus regarding the provision of goods or services in exchange for something of value. All parties involved must have intended to enter the contract.

Next, the parties must have entered into an agreement regarding the fundamental stipulations for the exchange of goods or services for something of value. Clearly it is easier to tell what the parties agreed to in a written contract, since the terms are set forth in black and white.

The last element of a valid contract is consideration. This means that each party to an oral or written contract must have gotten something of value. This usually means one party receives goods or services and the other receives payment for provision of such.

The statute of limitations and damages in California breach of contract cases

As experienced breach of contract lawyers, we often get questions about the deadline for initiating a breach of contract lawsuit. In California, this deadline – called the statute of limitations – varies based on the type of contract. The deadline for filing a breach of contract suit concerning a written contract is four years from the date the contract was broken. The deadline for filing a breach of contract suit concerning an oral contract is two years from the date the contract was broken.

Another question we often get is how much a prospective client stands to recover in a breach of contract case. Of course, that depends on the unique circumstances in each individual case.

That being said, California law addresses this question in a general context. As California Civil Code Section 3300 states: “For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom.” 

In other words, unless legally stipulated otherwise, the amount you stand to recover is limited to the amount of the financial losses you actually incurred due to the breach of contract.

As California Civil Code Section 3301 also states, “No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin.” Put in plain English, this simply means that to receive compensation in a breach of contract case: 1) there has to be a clear breach of contract; and 2) the losses claimed stemmed directly from the breach of contract and cannot be attributed to any other cause.

Additional legal provisions may apply depending on the specific circumstances of your case.

Contact knowledgeable California breach of contract attorneys today

If you think you have a breach of contract case, you need an experienced civil litigation attorney on your side. At the Law Office of Parag L. Amin P.C., (LawPLA) our clients are our top priority. That means we will take the time to thoroughly evaluate your situation and make sure you fully understand your legal options.

If pursuing legal recourse is an option and that’s what you choose, we’ll be with you every step of the way. But the first step is up to you. Give us a call or use the link on our website to contact our dedicated breach of contract lawyers to schedule a free consultation today.

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PLEASE NOTE: This is not a representation, warranty, or guarantee of a future result or outcome. Every case is different just like every one of our clients.

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