According to a survey published by the U.S. Chamber of Commerce, Florida ranks fifth in the nation for courts that are unfair and unfriendly to businesses. This highlights the need to approach breach of contract claims carefully. Business litigation can be expensive, and a courtroom trial generally carries an element of risk. Business leaders may consider working with experienced business litigation attorneys to handle breach of contract claims, and various defense strategies could be possible. The Chamber of Commerce shows that many business leaders feel unconfident about Florida courts, pointing to perceived issues like biased judges, difficult juries, and the problematic treatment of class-action lawsuits. Consider discussing these potential issues with an experienced Florida business litigation attorney. Expand upon this discussion by contacting Clearwater Business Law at (727) 502-6874. Our offices are conveniently located in cities like Clearwater, Tarpon Springs, Largo, Dunedin, and St. Petersburg.
Breach of Contract Claims Explained
A breach of contract claim falls into the category of business litigation. These claims arise after two or more parties agree to sign contracts with each other. Businesses may engage in various types of contracts, and the full list is too extensive to cover in one article. Examples include employment contracts, non-disclosure agreements (NDAs), sales contracts, commercial lease agreements, partnership agreements, loan agreements, contractor agreements, and supplier contracts. Business leaders who have other types of contracts in place may choose to discuss their specific situations with Clearwater Business Law.
When a party reneges on its contractual obligations or duties, another party to that contract may file a breach of contract claim. In this situation, the parties follow Florida contract law or the dispute resolution clauses of their contracts. Dispute resolution clauses are common, and they often force parties to attempt arbitration or other forms of alternative dispute resolution (ADR) before proceeding to trial. Depending on the situation, the aggrieved party can pursue “remedies” to achieve their goals during breach of contract claims. These remedies might include forcing the other party to fulfil their obligations, and this is called “specific performance.” They might also pursue damages, which means that they could receive financial compensation for the losses they have incurred due to the breach of contract. Finally, the aggrieved party might simply seek to terminate the contract.
Defense Strategies for Breach of Contract Claims in Florida
Those who face breach of contract claims have the right to defend themselves. They may execute defense strategies during private negotiations, or they may employ these strategies during trials. Whatever the case may be, business leaders and their attorneys should choose appropriate defense strategies based on the specifics of their claims. Various strategies are possible when facing breach of contract claims:
The Defense of Impossibility
In the eyes of the court, it is unreasonable for a party to fulfil its contractual obligations if it is impossible to do so. If a business faces a breach of contract claim due to an unforeseen event that made it impossible for it to fulfil its obligations, it can use this as a viable defense strategy. Note that the event or issue must go beyond a minor inconvenience or added cost. For this defense strategy to be successful, the business must establish that the events were completely out of its control.
The defending party must also show that it would have been impossible for any business to fulfil the obligations under similar circumstances. In other words, even the most effective and organized business could not have fulfilled the contract in the same situation. This is also called the “impracticality” defense. Examples of situations that can lead to this defense include natural disasters, unforeseen government interference, dramatic price increases, and uncontrollable supply chain issues.
The Plaintiff Also Breached the Contract
If the accusing party also breached the contract, then they may have no legal basis to bring a breach of contract claim. In the eyes of the court, these two breaches may “cancel each other out.” The logic is that if one party decides to sue, the other party can simply point to the mutual breach. This would make it unreasonable and unwise for either party to go to court. In this situation, it probably makes sense to resolve the dispute in private, perhaps through arbitration. Mutual breach is related to the “prior breach” doctrine in Florida. As the Florida Bar notes, a party is not obligated to fulfill its contractual obligations if the other party has already breached the contract.
There are numerous examples of mutual breaches. In the context of a sales agreement, the buyer may fail to provide the agreed-upon price, while the seller may simultaneously provide defective items. In this situation, there would be little point in litigating the dispute unless one party can establish that their alleged breaches never occurred. In the context of an employment contract, the employer may fail to provide the agreed-upon compensation while the employee simultaneously breaches the non-compete clause.
The Defense of Ratification
If a party knowingly allows and approves a breach of a contract, the other party cannot subsequently claim breach of contract. In other words, a business facing this type of claim can argue that the other party gave them permission to breach the contract. In the legal world, this is called “ratification.” For example, a seller might consistently deliver the agreed-upon goods late. Instead of holding the seller accountable for these breaches, the buyer might explicitly excuse or allow these late shipments. Perhaps they sent the seller an email or text message stating: “The late shipments are fine, as long as you do your best.” With this explicit ratification of the breach, the buyer may lose the right to subsequently bring a breach of contract claim for the late shipments.
Discuss Breach of Contract With Clearwater Business Law
Although online research may provide helpful insights into this subject, business litigation can be complex and multifaceted. Furthermore, the most appropriate defense strategies for breach of contract claims depend on the specifics of each case. An experienced business litigation attorney in Florida may be able to provide personalized guidance while suggesting defense strategies customized to meet the needs of each specific business. That being said, parties may also choose to resolve breach of contract disputes through ADR with guidance from contract law attorneys in Florida. To expand on these legal options, consider contacting Clearwater Business Law at (727) 502-6874. We serve clients in cities like Clearwater, New Port Richey, Pinellas Park, Oldsmar, and Palm Harbor.