Breach of Contract
Breach of contract is without a doubt the most common dispute involving business owners. Individuals and businesses enter into contracts in good faith and with the expectation that the other side will fulfill their promises. Unfortunately, claims for breach of contract occur frequently even in the absence of fraud and misrepresentation.
While there are some exceptions, such as the Statue of Frauds, contracts do not necessarily have to be in writing to be enforceable. An oral contract, or one just implied from the circumstances, may give rise to remedies.
The remedies for a breach of contract claim can vary as much as the type of contract itself. Breach of contract claims can give rise to money damages, which may include loss of the benefit of the bargain. In some cases, breach of contract claims may also give rise to injunctions, dissolution of partnership or business, or orders compelling the other side to comply with the contract. The most common situations in which the courts may compel performance under a contract rather than just award money are real estate purchase contracts and non-competition agreements.
One of the benefits of suing in contract, instead of tort, can be the right to claim attorneys’ fees. Generally speaking, when you sue someone you are not entitled to recover your attorneys’ fees. However, one of the major exceptions to this rule is when there is a provision in the contract that provides for attorneys’ fees. Most standard written contracts provide for the reasonable attorneys’ fees to be awarded to the prevailing party. This fee provision can be very important in determining whether it is economical to enforce your contract. Likewise, the fee provision also may prove influential in negotiations, as the breaching party will want to settle sooner than later to avoid additional fees from incurring.
One of the biggest issues often faced in breach of contract claims is the interpretation of the specific terms used in the agreement. When things are good, people often just simply draft their own short contract, or ask attorney to draft a “one-page” agreement thinking they are saving money. While that may be the case in the short-term, there is a reason why lawyer drafted contracts tend to be lengthy and wordy. The defining of terms is a huge concern if you want to avoid later litigation.
The courts do however have certain presumptions in interpreting ambiguous contract terms. For obvious reasons, the courts generally apply ordinary meanings to words when possible. When that does not resolve the ambiguity or dispute, the courts will of then try to apply the words in the context of the agreement as a whole: what were the parties trying to accomplish in the contract?
If that doesn’t solve it, what we often see is that the court will construe the ambiguities against the drafter of the agreement. For example, when there is a dispute over terms in an employment agreement, and the employer drafted the agreement, the courts will often construe those terms against the employer. This is particular helpful in not only employer agreements, but in real estate and other business agreements.
Whether your claim for breach of contract arises from a business or real estate transaction, the Business Attorneys at Eason & Tambornini would be glad to provide you assistance in enforcing your rights.