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What is a Breach of Contract?

On Behalf of | May 1, 2015 | Firm News |

Sometimes people need a lawyer’s help to enforce an agreement they made with someone else. A lot of people have an idea about a cause of action known as a breach of contract claim, but this post explains what is needed to form a legally enforceable contract, and then describes a breach of contract cause of action for a lawsuit.

In order to form a contract, you need to have the following elements:

  1. An offer must be made
  2. The offer must be accepted
  3. There must be a meeting of the minds – both parties need to agree on what the agreement is (both understand agreement)
  4. There must be consideration for the contract – essentially both sides need to get something, either a promise in exchange for a promise (I promise to pay you $100 if you promise to paint my kitchen) or, a bargain in exchange for performance (I will give you $100 when you paint my kitchen).

To show a breach of contract, you need to show:

  1. The existence of a valid contract (all the elements above)
  2. That one party failed to carry out a term of the contract
  3. That the unperformed term of the contract is a substantial/important part of the contract
  4. You were damaged as a result of the breach

Damages in a breach of contract case are calculated in one of the following ways:

  1. Benefit of the Bargain: This is the measure of damages that puts the nonbreaching party in the same position they would have been in had the contract been performed. For example, if the contract was a promise to pay $100 to paint the kitchen, but the kitchen isn’t painted and i need to pay another painter to do the same job but the replacement painter charges me $200, my damages are $100 (the difference between what I bargained for – $100, and what actually happened, $200).
  2. Reliance Damages: This measure of damages puts the nonbreaching party in the position they were in before the contract was made. For example, I pay you $100 to paint my kitchen. You don’t paint it, so I sue you to get my $100 back.