Businesses rely on contracts to provide a measure of certainty so they can produce goods and services for their customers. Claims for breach of contract may result in major disruption and significant losses for the aggrieved party. Because claims for breach of contract occur more frequently than we prefer, it is important to enforce your claim in a timely manner or to defend against allegations that you breached a contract because of the potential damages and loss of reputation.
Contract breaches are serious matters, and they demand serious legal representation. Whether you’re the plaintiff or defendant in a lawsuit, you can count on Peter Papagianakis and Business Law Firm, LLC, to advocate for you.
The Elements of a Breach of Contract claim?
To file a lawsuit based on breach of contract in New York, the party initiating the lawsuit (plaintiff) must make and file with the court certain specific statements (allegations) that eventually will need to be proven. Conversely, to defend oneself against a breach of contract claim, the defendant must be able to refute the plaintiff’s allegations (or claim that the allegations do not adequately state a claim for breach of contract). Understanding the necessary elements of a breach of contract claim is important regardless of whether you are the plaintiff or the defendant.
The four elements of a breach of contract claim are as follows:
- The existence of a contract between plaintiff and defendant.
Although this might sound like an obvious requirement, the fact is that not all agreements are legally enforceable as contracts. The basics of a contract are offer, acceptance, and consideration (the exchange of something of material value between the parties), and not every agreement has these. Also, while many contracts can be oral, some have to be in writing to be enforceable.
As well, the dispute in question must actually be between the plaintiff and defendant. It’s possible for a plaintiff to name and serve the wrong party, which often happens with larger businesses. Identifying the correct defendant is essential, and failing to do so could result in an incorrectly named defendant asking the lawsuit to be dismissed.
- Performance by the plaintiff.
“Performance” means a party did what they promised to do. In this case, the plaintiff must show that it performed under the contract. However, there are instances in which a plaintiff’s performance is conditioned upon other obligations being completed. As an example, the plaintiff might not have to pay under the contract until the defendant delivers the goods promised. If the defendant fails to perform in that scenario, the plaintiff could be excused from performance (paying).
- Breach by the defendant.
“Breach” means a party – in this case, the defendant – failed to perform its obligations under the contract. In New York, the breach has to be material. That means that the breach was with respect to an obligation that was very important to the overall purpose of the contract, which may be contested.
The fourth element is that the plaintiff has to allege (later prove) damages resulting from the defendant’s breach of the contract. Quantifying the nature and amount of damages can be a complicated endeavor. Because damages can result in significant losses for either party, the damages element also tends to be fiercely contested in court.
What Damages Are Available?
The goal of awarding damages is to put the aggrieved party (the plaintiff) in the same position as if the contract had not been breached. Generally, there are two types of damages a plaintiff may be able to recover: direct and consequential. Other damages may be available depending on the circumstances of the case, but these two are the most common.
Direct damages. These are actual damages that naturally and immediately result from a breach of contract. For example, if a plaintiff seller delivered goods to a defendant buyer who failed to pay for them, the direct damages would be the amount of money not received by the plaintiff. Or, if a defendant seller delivered flawed goods to the plaintiff buyer, the direct damages might be the difference between the value of those goods and their value had they not been flawed.
Consequential damages. These are damages that are not necessarily the direct result of the breach of contract but such damages arguably result from the breach of contract if they are reasonably foreseeable. Thus, consequential damages may be awarded by the court if they are proven. Common examples are lost profits from future transactions that were dependent on the transaction on which the breach of contract occurred and incidental damages, such as paying to ship flawed goods back to the seller.
Parties typically rely on their lawyers and expert witnesses to argue the nature and value of damages in court.
What Is The Statute Of Limitations On A Breach Of Contract Lawsuit?
A plaintiff doesn’t have unlimited time to file a lawsuit, due to something known as the statute of limitations. This is a deadline that a party has to bring legal action before the right to do so is forever lost. In New York, an aggrieved party has six years to file a breach of contract lawsuit (if the contract is in writing; if the contract is not in writing, there is a shorter time period limitation).
A defendant can seek to dismiss a breach of contract lawsuit that was filed against it if the lawsuit was filed after the statute of limitations expired. Accordingly, If you discover that the counterparty of your contracts has breached the contract, it is important that you timely seek the advice of an experienced New York contract attorney.
Contact Our New York Breach Of Contract Attorney
Contact this law firm today for more information regarding breach of contract claims and lawsuits.