WHAT ARE THE ELEMENTS OF
A BREACH OF CONTRACT CLAIM?
Jan. 22, 2021
If you have a contract in California with Company A to supply widgets to your Company B every Wednesday, but they don’t show up until Friday one week, is that a breach of contract? What if Bob has been contracted to do your company’s bookkeeping, but he suddenly disappears or makes continual excuses for why the work isn’t getting done? Is this a breach of contract?
Breach of contract can take many forms, but the overriding question is often: “How do I enforce the contract? If I can’t, can I seek legal restitution?”
If you’re located in the San Francisco Bay Area, contact the Law Offices of David H. Schwartz, INC. Business litigation attorney David Schwartz has 45 years of experience working with clients in their contract disputes, aiming for the optimal resolution before matters have to go to court.
What Is Breach of Contract?
A contract bestows certain obligations on the parties agreeing to it. A contract does not have to be written; it can also be oral, or even implied by the conduct of individual persons or entities acting together toward a goal.
A breach occurs when one party fails to live up to agreed-upon obligations — by not performing in the stipulated time-frame, not performing in the manner agreed upon, or not performing at all. The more specific the obligations and time elements (deadlines) set forth in a contract, the more binding it becomes and the easier it becomes to show breach.
Types of Breaches
Two broad categories of breaches are “material” and “immaterial.” In the scenario of late delivery of the widgets mentioned above, the breach would likely be immaterial if no time element had been agreed upon. If the contract specified that the items must be delivered every Wednesday or else, then the breach could be considered material. The supplier had breached a specific and necessary condition of the contract.
Put another way, a material breach, if not rectified, can defeat the whole purpose of the contract.
A breach can also be considered “partial” or “total.” Say Company A delivered the widgets on time but fell short of the number specified in the contract. They delivered only a third of what the contract specifies. That could be a partial breach.
Say Bob the accountant accomplishes only half of the accounting he was contracted for; it’s submitted on time but incomplete. This could be a partial breach. If Company A delivers nothing or delivers the full amount later than the contracted time, that could be a total breach. If Bob just disappears and does nothing, that would be a total breach. Note, however, that the distinction between “total” and “partial” can often become murky.
Elements of a Breach of Contract
The “essential elements” of a breach of contract claim in California are set forth in the Judicial Council of California’s Civil Jury Instructions, or CACI’s, No. 303. These elements are:
The plaintiff and defendant had entered into a contract
The plaintiff performed as specified or was excused for nonperformance
The defendant failed to perform under the contract
The plaintiff was harmed
The defendant’s breach of contract was a substantial factor in the plaintiff’s harm
When one party to a contract, either through words or actions, indicates that it is not going to perform its contractual obligations, the other party can then immediately claim breach of contract. This is the legal concept of anticipatory repudiation.
Note, however, that the other party’s words or actions cannot be ambiguous. If they say, “We won’t be able to deliver the products as promised because of the weather,” that does not constitute anticipatory repudiation. If they say, “We won’t be able to deliver as promised,” that can form anticipatory repudiation.
Remedies for Breach of Contract
When a party to a contract suffers a breach, the remedies — or relief — are threefold:
Damages: The plaintiff can seek compensatory damages for losses; nominal damages when no money is actually lost; and liquidated damages specified in the body of the contract itself. (Punitive damages are possible but rare.)
Specific Performance: The court orders the breaching party to carry out its obligations, or specific performance.
Cancellation and Restitution: The non-breaching party can cancel the contract and return to the situation it was in operationally before the contract — known as “restitution.”
Work with an Experienced Attorney
Business litigation attorney David H. Schwartz will first seek to settle matters out of court through negotiation or mediation. If matters cannot be resolved in that way, he and his associates will vigorously pursue your rights to compensation through the courts. He has both the experience and resources to comb through the communications and other pertinent documents to buttress your case and strive for the optimal outcome.
If you’re in San Francisco, or nearby in Oakland, San Mateo, Santa Clara, San Jose, or elsewhere nearby, and you’re facing a contract dispute or contemplating a breach of contract claim, contact the Law Offices of David H. Schwartz, INC immediately.