We deal with contracts in our everyday personal and business lives. California law defines a contract broadly as “an agreement to do or not to do a certain thing.” From software license agreements on our electronic devices, service agreements, promissory notes and purchase agreements we deal with contracts every day. In fact, you enter contracts daily without even thinking about it. A contract can even be unwritten, provided that the parties intend the agreement to be binding, and each party to the agreement promises to do something in reliance on the other’s promise.
Most of the time, the parties perform their mutual promises without any problems. When one party fails to do so, they may be in breach of the agreement, and there may be legal consequences. In order to determine whether you have a viable claim against the other party, you or your attorney must analyze the facts of the breach and the terms of the agreement. As a threshold issue, once one party breaches an agreement, the clock starts running. Generally speaking, in California a lawsuit on a contract must be brought within 2 years of the agreement is oral or 4 years if in writing and signed by the parties or it is said to be barred by the “statute of limitations.”
If your claim is timely, in order to prevail in court, a plaintiff must allege and then prove all of the necessary elements of the claim.
First, the plaintiff must establish that there was in fact an agreement between the parties. Obviously, it is easier to prove the existence of a written agreement signed by the parties, but an oral agreement is enforceable, subject to very limited exceptions, which are beyond the scope of this post.
Second, the plaintiff must establish that he, she or it did all or substantially all the things that the plaintiff promised to do in the agreement, or was somehow excused from doing those things.
Third, that all of the conditions required for by the contract for the plaintiff’s performance had occurred.
Fourth, either the defendant then failed to do something he, she or it was required to do under the agreement or that the defendant did something that was prohibited by the agreement.
Fifth that the plaintiff was damaged by the breach of the agreement.
If these elements are satisfied, then a court may find for the plaintiff and award appropriate damages.
Before rushing to court to file, there are some other issues to consider. First, is there a chance to resolve the dispute without filing a lawsuit. I find that often that both parties want the matter resolved and do not want an expensive lawsuit, but can’t seem to come to terms. A good lawyer will always discuss options for resolution of a case with you. Also, some contracts provide that the winner of the lawsuit recovers his or her attorney’s fees. If no such provision is present, then the winner may not recover legal fees and thus, may not be made “whole” even if she prevails in the case.
If you think you might have a claim for damages, you should promptly seek the advice of a legal professional. A good lawyer can help you assess the merits of the claim, and whether it is worth the time and expense required.