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Contract Law

Generally, a breach of contract is a failure, without legal justification, to perform a promise made in a contract. This could include anything from failing to perform in a way that meets the standards of the industry to a failure to uphold an express or implied warranty. Contract breaches can be devastating for the wronged party, so if you formed a contract that was not fulfilled, it is important to contact an experienced business law attorney who can help you seek restitution.

Identifying a Breach

When a plaintiff claims that another party breached a contract, a court is required to analyze certain factors in making its determination, including:

  • Whether a contract between the parties ever existed;
  • If a contract did exist, what the terms of the agreement entailed;
  • Whether the contract was ever modified;
  • Whether one of the parties ever breached the contract;
  • If there was a breach, whether it was material to the contract;
  • Whether the breaching party had a legal defense for his or her actions; and
  • What type of damages resulted from the breach.

The first part of the determination requires an analysis of whether the contract in question was valid. To be considered a valid contract, an agreement must include an offer by one party and an acceptance by another. Something of value must also be given in return for the promise of completion. Finally, the terms of a contract must be defined specifically enough that they could be enforced by a court.

When a court determines that one party did commit a breach according to the terms of the agreement, it must determine whether that breach was material to the contract. Florida is the only state in the nation where some courts require a showing of materiality in breach of contract cases. Elsewhere in the country, any type of breach, no matter how minor gives rise to a claim of damages. As a result, breach of contract cases can be more difficult to litigate in Florida than in other parts of the country.

Generally, a breach is material, if as a result of the failure to perform, the non-breaching party received something substantially different than what was specified under the terms of the contract. To decide whether a breach was material, courts analyze the following factors:

  • The amount of benefit received by the non-breaching party;
  • Whether the non-breaching party can be compensated;
  • How much performance the breaching party actually completed;
  • Whether hardship prevented full performance;
  • Whether the breaching party exhibited negligent or willful behavior in breaching the contract;
  • The likelihood that the breaching party will perform the rest of the contract.

Even if a party did not receive the item or service contracted for on time, the breach will usually only be considered minor if the breaching party performed its obligations within a reasonable time. In these cases, the non-breaching party must still hold up his or her end of the contract.

Legal Defenses and Remedies

If a court determines that a breach was material, it will then look to the facts in an attempt to discover whether the breaching party had a legal defense excusing him or her from performance. Valid defenses include:

  • A lack of capacity to form a contract, due to age or mental impairment;
  • The non-breaching party used undue influence or misrepresentation to force the breaching party to agree to the contract;
  • The contract’s terms were oppressive or the bargaining process was unconscionably unfair, which is usually demonstrated by a gross inequality in bargaining power between the parties;
  • The contract required illegal or immoral conduct; and
  • Both parties made a mistake regarding a basic fact on which the contract was based, the mistake was material, and the non-breaching party did not assume the risk of mistake in the contract.

If a court finds that a breaching party had a valid defense to a contract, the non-breaching party has the option of canceling or revoking it. In extremely unfair situations, a court will declare the contract void. Finally, a court will assess whether the non-breaching party is entitled to a remedy, which could include:

  • Damages;
  • Specific performance; or
  • Cancellation and restitution.

The most common remedy for a breach of contract claim is the payment of damages, of which there are four types:

  • Compensatory damages, which help put the non-breaching party in the position he or she would have been in if there had been no breach;
  • Punitive damages, which are intended to punish a wrongful act and are rarely awarded in breach of contract cases;
  • Nominal damages, which are awarded when a contract was breached, but the non-breaching party cannot prove actual economic loss; and
  • Liquidated damages, which are specific damages outlined in the contract itself.

When damages are not enough to make a non-breaching party whole, the breaching party can be court-ordered to perform his or her part of the contract, a concept known as specific performance. Usually, courts only order specific performance when the subject matter of a contract is unique or rare and damages would be an insufficient remedy. For instance, courts have found specific performance appropriate when a contract concerned a work of art, a custom made product, goods in short supply, or real estate.

Finally, a non-breaching party can cancel a contract which essentially voids it and relieves all parties of any further obligation under the terms of the contract. However, if non-breaching parties have already given a benefit to the other party, they can sue for restitution in an amount that would put them in the same position they were in before they entered the contract.

Contact Clearwater Business Law to Speak with an Experienced Contract Law Attorney

At Clearwater Business Law, our legal team is dedicated to helping our clients enforce or defend a contract. If you have questions or concerns about your own obligations under a contract, please contact us by calling (727) 785-5100 or send us an email containing a brief description of your case.

TESTIMONIALS

I strongly endorse Andrew Mongelluzzi. He is a very skilled and able business attorney focused on customer service and results. On the front end, Andrew deftly advises new businesses on organizing properly, acquiring necessary licenses, contracting with vendors & customers, and dealing with various compliance issues that may arise. On the back end when things go south, Andrew counsels and navigates businesses through complex commercial disputes and aggressively represents them in negotiations, mediation, arbitration, and in litigation so that businesses can legally move on and get back to business. Andrew’s ability to identify legal issues and approaches to resolve business-related issues is a strength that I have learned from and professionally relied upon in approaching the business matters and cases that I handle. I regularly refer business to Andrew knowing that he will diligently represent his business clients and their best interests.
Relationship: worked together on matter

- Frank N. Genco, Florida Bar No. 440086

We hired Andrew to help us when our insurance company denied our claim when water and sewage damage completely destroyed our Florida Condominium. Even though Andrew made several phone calls and wrote an initial letter, the company continued to deny our claim. He was persistent and continued to help us negotiate with the company until we finally received a fair monetary settlement. He was always quick to respond, helpful, and courteous when working with us. I would recommend him to anyone who is fighting an unjust insurance settlement.

- Harvey

Andrew has represented my business for several years in the area of corporate law, business transactions, collection matters, contract matters, employee disputes, and more. He has always been more than approachable, accommodating and understanding. His approach is not like other lawyers in that he deals with you on your level and is able to incorporate his legal strategies into our business plan/model; instead of allowing lawsuits to takeover the business. Further, his education and practical experience in the business world equates to a valuable understanding of my business.

- Chris

Attorney Mongelluzzi and his team provided excellent and quality service. I always felt that my needs were met and that the firm was invested in me and my case. The quality services I received at Mongelluzzi’s firm were remarkable. From the initial meeting they were responsive to my calls, questions and concerns. All issues were handled professionally and timely, easily accessible, got back to me quickly, aggressive and got me the results that I wanted. Attorney Mongelluzzi and his staff all gave my case their personal attention and provided the quality of work that anyone would want when hiring an attorney.

- Client

Andrew is very thorough defining the outcome expectations. In my case, it was setting up a new corporate entity. He advised me on the most beneficial option and he then executed on that path. Andrew is a very pleasant person to work with. He is determined, skilled and committed to his client’s success.

- Gil Pinney

Andrew helped me through a difficult situation with American Express and we won the case. A great job by Andrew! He also helped me with T&C’s in my company. I would recommend Andrew highly as an attorney.

- John Sams

As a business owner for 12 years I have seen my fair share of ups and downs. Some of the downs would include landlord/tenant disputes and creditors that may have not been fulfilled to agreement. Andrew has met both of these situations for me in a timely, positive, and affordable manner.

- Rich Mattes

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