California Breach of Contract Attorney
Contracts are more prevalent today than ever. They are used for everything, from using a cell phone to opening financial accounts to real estate dealings. In fact, not having a contract or having one that doesn’t cover all obligations for the situation can lead to misunderstandings or one party breaching the contract without realizing it. If you or your business has been involved in a contract dispute, it’s a good idea to consult with a California breach of contract lawyer.
At Century Law Group, LLP, we take the time to understand your unique situation and work diligently to protect your interests. Our personalized approach allows us to pursue effective solutions tailored to your contract dispute.
Overview of Contracts
Understanding how different kinds of contracts work and why they are used can protect you and your business in legal and business transactions. A contract is an agreement that defines the terms and expectations of parties involved in a transaction. However, not all contracts are legally binding. For a contract to be legally binding, it must meet the following conditions:
- It must have a clear offer with the intention of creating a legally binding contract
- There must be a clear acceptance of that offer
- Both sides must agree to give something of value in exchange for receiving something else of value
- No party can agree to anything illegal
- All parties must have the ability to legally enter the contract
- All parties have to agree on the terms of the contract
Types of Contracts
What often comes to mind with contracts is long documents, such as a mortgage contract; however, there are many kinds of contracts, and if they meet the criteria outlined above, they may be legally binding. An important distinction is whether the contract is formal or informal.
Informal Contracts
Informal or simple contracts don’t always follow a particular process. They can be written or oral, but either way, they are legally binding if they meet the conditions of a contract. Informal contracts are usually created without consulting a lawyer, contain little to no legal terms, and are used in casual transactions, like friends splitting the cost of a trip.
Formal Contracts
Formal contracts are usually written and structured and use precise technical and legal terms. They may also have specific requirements for each party involved. Formal contracts are almost always used in official business and legal transactions, and they seek to provide protection for all parties in situations that can be anticipated. Large businesses and government agencies usually have lawyers write or consult on their contracts.
Differences Between Informal Contracts and Formal Contracts
When all parties in a transaction do as agreed in the contract, there are usually no problems. Issues arise when one or more parties don’t meet the expectations of other parties involved in the transaction. Informal contracts and formal contracts have some key differences in how they protect all the parties involved.
An informal contract normally covers the general intention of the offer but often won’t include anything about dispute resolution. They are often created at the moment and can leave a lot of room for interpretation, which can lead to informal contracts being hard to enforce, especially when they aren’t written.
The main function of a formal contract is to provide protection for all the parties involved in a transaction. Formal contracts usually have detailed expectations and obligations for each party. This might include timelines, payments, and delivery, as well as predetermined contingencies to address disputes if they occur. Formal contracts often require review by legal professionals, signatures, and even notarization so they can be easier to enforce legally.
Real Estate Contracts
A real estate purchase agreement or contract of sale contains many terms and conditions of sale. If the seller or buyer fails to comply with the terms or conditions, such as the seller failing to provide clear title to the property, that party is said to have breached or defaulted on the agreement, and the other party may have a legal claim against the breaching party. If one of the parties fails to meet a contingency of the contract, such as the buyer failing to obtain financing, the parties will be released from the contract. If there is a dispute between the parties, they must use the dispute resolution process indicated in the contract, which may require the parties to resolve the dispute without going to court.
Purchase agreements and contracts of sale contain many terms and conditions that the parties have agreed to meet, such as:
- The purchase price
- The date the sale will be finalized (“closed”) and the date the buyer will move in
- Items to be included in the sale, such as carpeting, lighting fixtures, appliances and so forth
- Items not included in the sale
- A legal description of the property
- A guarantee that the seller will provide clear title to the home, through an abstract of title, certificate of title or a title insurance policy
- A provision that the seller is responsible for paying house-related expenses through the closing date
If the party who is responsible for complying with the specific term or condition fails to comply, that party has breached or defaulted on the contract. For instance, if the seller fails to provide an abstract of title showing clear title to the property, the seller has breached the agreement. Also, if the seller takes lighting fixtures which he had agreed to leave, the seller has breached the agreement. The buyer can agree to a modification of the contract as to the title or the lighting fixtures and the price, or the buyer can offer to perform under the contract and then file a claim against the seller for breach of contract.
If the parties can’t agree on how to resolve the matter, the parties must use the dispute resolution process if one has been included in the contract. Usually, this is arbitration, mediation or small claims court. Such alternative methods for resolving disputes are usually less costly and more efficient than filing a traditional lawsuit. The parties submit the matter to the arbitrator, mediator, or judge, and that person decides which party breached the contract. Sales contracts often provide for liquidated damages if one party or the other breaches the contract-this means that the sales contract provides that should there be a breach of contract, the damages to the party not in breach of contract will be for a set amount of money, which is often the amount of the buyer’s deposit or earnest money.
Purchase agreements and contracts of sale typically contain several contingencies that must be met in order for the sale to proceed. These contingencies can include:
- A satisfactory inspection report for the property
- The buyer getting a mortgage or other financing
- The buyer selling his current house
If the contingencies of sale are not met, the buyer can withdraw his offer and get a refund of his deposit. For example, if the buyer can’t obtain financing as described in the sales contract, for example, a loan for a specified amount and interest rate within a set time period, the contingency of the buyer obtaining specified financing has not been met and the buyer can withdraw his offer. The seller is then supposed to refund the buyer’s deposit.
If there is a dispute between the parties on the matter of contingencies, the parties must use the dispute resolution process specified in the contract. The arbitrator, mediator or small claims court judge will decide the matter according to the provisions of the contract.
Purchase agreements and contracts of sale often contain provisions specifying the kinds of dispute resolution that the parties agree to follow if they disagree on the performance of the sales contract. These kinds of dispute resolution can include:
- Arbitration. This process involves the parties submitting their dispute to an individual, the arbitrator, who is not a court officer and who decides the matter; this alternative method to resolving a dispute is often required by the terms of the parties’ contract. In “binding arbitration” the parties are bound by the arbitration award and are not entitled to a court’s review of arbitrator’s decision, except under extremely limited circumstances.
- Mediation. This is a process in which a third party guides disputing parties and helps them find a mutually agreeable solution to their problem. Mediators provide this service in many places and in various areas of law.
- Small claims court. This is a division of a county court in most places, and it has authority over lawsuits in which the amount in dispute is less than a set figure, such as $ 3,000. (Source: Lawyers.com)
A Contract Lawyer Can Help
The purpose of a contract is to make sure all parties’ obligations are clear and protect the rights of those involved. If you have been involved in a transaction where another party breached the contract, a contract attorney can help you determine your next steps and possible outcomes, as well as represent you in negotiations and court if the case needs to be litigated.
FAQ
Q: Can You Sue for a Breach of Contract in California?
A: Yes, you can sue for a breach of contract in California; however, there may be limitations on when and where you can file the claim and how much you can receive in damages. In addition, some contracts outline a dispute process that you must go through before you can take formal legal action. Many contract disputes can be resolved without litigation.
Q: Is It Worth Suing for a Breach of Contract?
A: Whether it is worth suing for a breach of contract depends on the circumstances. If you’re thinking about suing for a breach of contract, it’s important to consider what damages you expect to receive, whether you did get some or most of what you expected, and any reasons why the other party may not have met their obligations. An experienced contract lawyer can help you determine what course of action may benefit you most in your situation.
Q: How Do You Prove a Breach of Contract in California?
A: In order to prove a breach of contract in California, you have to show that the other party did not meet their contractual obligations by demonstrating the following elements:
- There was a valid contract
- You upheld your obligations as outlined
- How the other party breached the terms
- You suffered damages because of the breach
Q: How Much Compensation Can You Get for a Breach of Contract?
A: The amount of compensation you can get for a breach of contract depends on the kinds of damages you are awarded. Damages you may receive include general damages, which is the amount of money lost; special damages, which are expenses incurred because you expected the contract to be fulfilled, such as purchasing special equipment; and punitive damages, which punish the other party for gross misconduct. Some contracts have a predetermined amount.
Consult With a California Breach of Contract Lawyer
If you entered into a contract with someone who broke the agreement, a skilled contract lawyer from Century Law Group can review the details of your case and the terms of the contract to determine if you have grounds for a claim. They can help you calculate your losses and assess whether the contract includes stipulations for handling disputes.
For legal assistance, call 866-522-2642 or contact us online to schedule a consultation with an experienced real estate lawyer regarding your Breach of Contract dispute. This keeps it formal, professional, and natural. Let me know if you need any further refinements!
