Breach of Contract

Avoid or Resolve Breach of Contract
Handle Breach of Contract

How to Win Breach of Contract Disputes

Remedies for Breach of Contract with Examples
The shock of breach of contract can bring immediate feelings of anger and even fear. Key relationships may be threatened. Cash flow can drop to nothing and finances put in a tailspin. Contract breach can happen when there’s a failure to pay, or failure to perform, or due to negligence. Even personal life can be threatened with breach of contract to marry. For success, don’t handle breach of contract alone.
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How to Solve Breach of Contract

Breach of contract happens because a contract signer decides it is in his/her/its best interest to not respect the agreement. So that person stops doing what he/she/it agreed to do. In legal terms that “party” to the contract stops “performing” causing a breach of contract. If caught early enough, it may be possible to avoid a breach of contract. Don’t delay, get help now with your Free Lawyer Consultation.

If you’re already in a breach of contract situation, take a breath. Check out the information below, review your options, and let’s get started on your breach of contract game plan.

Define Breach – What is Breach of Contract Definition and Meaning?

Breach, in everyday language, is when people enter into a legal agreement, and at least one person does not do what it agreed to do. That’s a basic way to define breach. The more technical breach definition, the way courts define breach, has four parts or “elements.”

Under New York law, the essential elements of a law suit to recover damages for breach of contract are:

  1. the existence of a contract,
  2. the plaintiff’s (non-breaching person) performance pursuant to the contract,
  3. the defendant’s (breaching person) breach of its contractual obligations, and
  4. damages resulting from the breach.

Generally, one person’s material breach of a contract excuses the other person from further performance under the contract. The non-breaching person does not have any further obligations under the contract and is free to either terminate the contract and sue for damages, or continue the contract.

Another contract breach definition is “anticipatory breach” which is also known as “anticipatory repudiation.” This is a situation where one party to a contract expects that the other party will breach the contract. So the first party decides that it will save itself by no longer performing under the contract. Under the law, this “anticipatory breach” or “anticipatory repudiation” - breaching before the other party gets the chance - can also lead to a breach of contract lawsuit.

The key difference between the typical breach of contract and an anticipatory breach is the timing. In the typical breach of contract, a person fails to do something when he/she is contractually obligated to. In an anticipatory breach, before the time to do the thing arrives, a person uses clear words or actions to show he/she will not respect the contract. If you’re in an anticipatory breach situation, remember the breach only happens if the breaching party finally, definitely, and unequivocally communicates its intention to not to perform all of its future contractual obligations.

Whether you’re dealing with the typical breach or anticipatory breach, the clock is ticking. Click for your breach of contract free lawyer consultation or call now (212) 658-1752.

Breach of Contract under Contract Law

Under contract law, breach of contract breach happens when at least two people enter into a contract, one person does what he/she agreed to do, but the other person doesn’t do what he/she agreed to do, causing the first person damage. The failure to do what he/she agreed to do is what causes the contract breach or gap in performance.

If you’ve done everything that you can, and think that you won’t be able to avoid a lawsuit, keep these three breach of contract law hurdles in mind.

Contract Law of Breach – Statute of Limitations

The first hurdle is getting to the court in time. This is very important. If you don’t file your lawsuit within a certain period of time, the Court will throw out your case. This is known as a “statute of limitations.” For breach of contract, the New York statute of limitations is six (6) years from the date of the breach. This means that a breach of contract lawsuit must be brought within six years of the date the contract was breached.

Now there are some tricky details that you should keep in mind. The goal of the breach of contract statute of limitation is to preserve the “objectives of finality, certainty and predictability.” This means that the clock starts ticking as soon as the breach happens, even though you may not be aware of the breach. This also means that it’s possible for a contract breach to happen on one date, but for damages to occur at some later date. Where contract performance can be more easily measured, such as in construction, a breach of contract lawsuit could be made “upon substantial completion of the work” Eastco Bldg. Servs., Inc. v New York City Hous. Auth., 98 AD3d 920 (1st Dept. 2012). Because a wrong decision could cause you to lose your legal rights, get help now. Schedule you Free Lawyer Consultation.

Contract Law of Breach – Contract Interpretation

Conflicting interpretations of the contract is the second hurdle. Some breach of contract cases come down to misunderstandings that turn into monsters. Basically the “two ships passing in the night” story. The misunderstanding could be caused by things that the contract parties never really agreed on. Or it could be due to confusing contract language that opens the door to different interpretations. The end result is a breach of contract in at least one person’s eyes.

When this type of breach of contract lawsuit lands in the court, everybody is at the mercy of the court. Under New York law, the court decides whether the contract is ambiguous. Contract language is ambiguous “when the contract, read as a whole, fails to disclose its purpose and the parties’ intent, or when specific language [can lead to] two reasonable interpretations.” Contract language is unambiguous when it has a “ definite and precise meaning” and there is little “danger of misconception...and...no reasonable basis for a difference of opinion.”

If your contract is unambiguous, the court must enforce the contract “according to the plain meaning of its terms.” This usually means that the court should rely on the contract itself, not outside information. But if the contract language can reasonably lead to two different interpretations, the court chooses its own interpretation. The court can then use outside information to figure out what the contract parties were trying to do.

If possible, try to clean up your contract so that you can avoid the contract law interpretation problem. Get your contract reviewed now. If you’re already in a potential breach of contract situation, look into working something out that everyone can agree to. Call now: (212) 658-1752. If you’re in lawsuit territory already, try to get a sense of the court’s direction. Get your Free Lawyer Consultation.

Contract Law of Breach – Damages

The third breach of contract law hurdle is damages. Even if you don’t plan on bringing a breach of contract lawsuit, you should be able to prove that the contract breach damaged you. In other words, the breach caused you to lose something. Maybe you lost benefits under the contract, or had to spend money that you otherwise would not have had to spend.

In a breach of contract lawsuit, the court tries to award damages so that the injured person is put back in the same position he/she would have been in if the contract had not been breached. The court looks to the contract to figure out what the injured party would have received if the contract had been respected. The court then calculates the injured party’s net loss. The net loss should equal: (i) benefits the injured party would have received if the contract had not been breached; minus (ii) losses the injured party avoided due to the breach; minus (iii) benefits the injured party received because of the breach of contract.

Some contracts include language that sets out damages in the event the contract is breached. In contract law, these are known as “liquidated damages” provisions. Liquidated damages provisions are effective when “the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation.” This means that if the contract specifies damages, the damages should have reasonable relationship to the actual injury. And the injury itself should be somewhat difficult to directly quantify. Otherwise, the court will reject the liquidated damages provision and find that it is an unenforceable penalty.

These are three contract law hurdles that you may face in a breach of contract situation. Of course, there are other contract law hurdles that you may face. You will need to examine your particular situation to best determine how to proceed.

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Breach of Contract and Civil Rights Law

In the marriage context, breach of contract can happen if one person decides to break-off the engagement before the wedding. In New York, this fiancee “breach of contract” triggers the Civil Rights Law. Specifically, New York Civil Rights Law § 80-b.

Some brief history. Before 1965, the New York “heart balm statute” prevented fiancees from bringing lawsuits to recover things given to seal the marriage deal. This meant that if a person gave money, property, an engagement ring, a dowry, etc., as a way to solidify an engagement to marry, that person could not recover the items through a lawsuit.

That changed under New York Civil Rights Law § 80-b. Now, if a marriage engagement is called off, and there is difficulty recovering engagement items, New York Civil Rights Law § 80-b can be used to bring a lawsuit. As long as the marriage has not taken place, § 80-b of the Civil Rights Law can be used to recover an engagement ring, money, property, a dowry, etc. There are a few basic conditions. First, the item(s) must have been given during the engagement period. Second, the item(s) must have been given solely in contemplation of marriage. Third, the marriage cannot have taken place.

Nowadays, this type of civil rights law breach of contract typically happens with engagement rings. Things go sour, the engagement is broken off, and there’s trouble getting the return of the engagement ring. New York law, “recognize[s] the unique essence and purpose of an engagement ring as being given in contemplation of marriage.” “[F]airness requires its return to the donor when no marriage occurs regardless of who is responsible for such failure.” Under the Civil Rights Law, “[t]here is a strong presumption that any gifts made during the engagement period are given solely in contemplation of marriage.” This presumption can be overcome with “clear and convincing proof.”

There are two main ways out of the New York Civil Rights Law § 80-b. If your situation falls under one of these exceptions, you may not be legally required to return the engagement ring or other property. The first exception is either you or your fiancee was married when the engagement gift was given. This is because New York does not allow a person to be married under the law to two persons at the same time. So if either fiancee was married when the gift was given, the gift (e.g. engagement ring) could not have been legally given “in contemplation of marriage.”

The second exception to New York Civil Rights Law § 80-b, is if the item (e.g. engagement ring) was either given as an ordinary gift, or converted into an ordinary gift. For example, in one case, after the engagement had been called off, a man sent a text to his fiancee telling her that she could keep the 3 carat engagement ring as a gift. Numerous additional text messages confirmed that he was okay with his ex-fiancee keeping the engagement ring as a gift. But the relationship further deteriorated and the man changed his mind. The court found that the “gift in contemplation of marriage” had been transformed into “an ordinary gift.” An ordinary gift is made when, “there...exist[s] the intent on the part of the [person giving the gift] to make a present transfer delivery of the gift, either actual or constructive to the [person receiving the gift], and acceptance by the [person receiving the gift].”

Under New York law, an ordinary gift cannot be taken back. “[O]nce given [an ordinary gift] vests immediately and irrevocably in the [receiver of the gift], and the [giver’s] later acts cannot revoke or retract it.” 62 NY Jur § 54 (NY Jur 2nd Ed. 2014). The only way out is by proving either fraud or mistake.

If you’re in a fiancee breach of contract situation, or think you may end up facing one, don’t wait. Get advice now. New York Civil Rights Law § 80-b may apply if the engagement gift has not been turned into an ordinary gift.

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Contract Clause and Breach of Contract

In a breach of contract situation, the contract clause, and the contract itself, rein supreme if unambiguous. “Where the terms of a contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and reading the contract as a whole.” Greenfield v Philles Records, 98 NY2d 562, 569 (1st Dep’t 2002). For more about ambiguous and unambiguous breach of contract, see above, Contract Law of Breach – Contract Interpretation.

Let’s look at two contract clauses that could be helpful in a breach of contract situation, even if the situation is ambiguous. First, as mentioned above, breach of contract lawsuits must be brought within six years of the breach. This can sometimes cause problems when it is difficult to pinpoint when the breach occurred or when the damages occurred. Contract clauses that require continuing performance may ease this problem. If “a contract provides for continuing performance over a period of time, each breach may begin the running of the statute anew such that accrual occurs continuously and plaintiffs may assert claims for damages occurring up to six years prior to filing of the suit.” Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 80 (4th Dept 1980). You can recover any damages that happened within the six years before you brought the suit. Anything that happened more than six years before the suit cannot be recovered.

The second potentially useful contract clause also relates to the breach of contract statute of limitation. This second type of contract clause tries to directly target the statute of limitations. It does this by requiring that specific events happen before the breach of contract clock, the statute of limitations, begins to run. This type of contract clause typically requires three things to happen before a legal breach can be said to occur: (a) the breach is either discovered by the non-breaching party, or the breaching party provides notice of the breach; (b) the breaching party does not fix the breach within a certain period of time; and (c) after the breaching party fails to fix the breach, the non-breaching party demands that the breaching party respect the agreement. This seems like a good contract clause because it helps both parties be clear on the things that must happen before a breach of contract lawsuit can be brought.

Unfortunately, New York courts have found that this type of “accrual provision” is unenforceable. Firstly, the courts find that this type of provision “runs afoul of” “the public policies of ‘finality, certainty and predictability that [our] contract law endorses.’” And secondly, “[t]he accrual provision’s set of conditions creates an imprecisely ascertainable accrual date—possibly occurring decades in the future...—which the Court of Appeals has ‘repeatedly rejected.’”

There are other contract clauses that could be helpful in a breach of contract situation. It really depends on your particular scenario. The two contract clauses discussed above both focus on the statute of limitations. The reason is simple, even if you do not plan on going to court with your breach of contract, the lawsuit option provides you with alternatives and possible leverage. A statute of limitation problem may destroy any chance of a breach of contract recovery.

Because the six (6) year statute of limitation may already be running, get help with your contract clause right away. Click for your breach of contract free lawyer consultation now.

Gross Negligence and Breach of Contract

Occasionally, a breach of contract situation comes up due to gross negligence. In New York, breach of contract “gross negligence” is taken to mean, “conduct that [shows] a reckless disregard for the rights of others or ‘smacks' of intentional wrongdoing.” Colnaghi, U.S.A. v Jewelers Protection Servs., 81 NY2d 821, 823-824 (1993). Examples of “reckless disregard” showing gross negligence include: widespread breaches of contract; failure to meet even minimal standards; failure to verify basic or critical information that’s key to the contract performance; a pattern of totally ignoring contractual obligations; total disregard of known or obvious risks; serious and pervasive misrepresentations; failure to provide notice of rampant breaches or fix the breaches.

The main effect of gross negligence in a breach of contract is to remove some of the limits on damages. Under the law, parties to a contract can limit breach of contract liability. On top of that, the law itself limits breach of contract damages to the injured party’s net loss. For more information about breach of contract damages, see above Contract Law of Breach – Damages.

Gross negligence provides an exception to the limits on recovery for breach of contract. Basically, the law does not allow a person to shield her/himself from injury caused by gross negligence. A finding of gross negligence allows you to do away with any contractual agreement to limit recovery due to breach of contract.

Because courts usually honor breach of contract limitations that the parties have contractually agreed, the sooner you look for gross negligence, the better. The amount of your monetary recovery, if any, may depend on it.

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Breach of Contract and Criminal Negligence

Criminal negligence occasionally pops up in the breach of contract context. These are not typical situations. In general, contract misrepresentations or false promises are dealt with under the civil law. An injured contract party can bring a lawsuit to defend his/her rights and seek a recovery under contract law. However, some situations get so out of hand that the breach of contract turns into a matter of criminal negligence.

These criminal negligence breach of contract situations generally fall under New York’s “Larceny by False Promise” law. “However, the law does not criminalize every breach of contract, and will only call it a larceny when a party has effectively obtained property by a fraud to the detriment of the other party.” So that most breaches of contract don’t turn into a crime, the law sets a high barrier to criminal negligence, or larceny by false promise, breach of contract cases. It’s generally much easier to win a breach of contract lawsuit in civil court than to succeed under criminal negligence (larceny by false promise).

Although this type of breach of contract is sometimes referred to as criminal negligence, in New York the focus is very much on intentional behavior. The breaching person must have entered into the contract while having zero intention of ever fulfilling his/her contractual obligations. According to New York Penal Law § 155.05 (2) (d), Larceny by False Promise happens, “when, pursuant to a scheme to defraud, [a person] obtains property of another by means of a representation, express or implied, that he ... will in the future engage in particular conduct, and when he does not intend to engage in such conduct.”

The criminal negligence standard is a tough standard. The evidence must show facts which are “wholly consistent with guilty intent or belief and wholly inconsistent with innocent intent or belief, and excluding to a moral certainty every hypothesis except that of the defendant's intention or belief that the promise would not be performed.” (Penal Law § 155.05 [2] [d]). So these types of cases are discouraged except when the “fraudulent character” of the breach of contract is a “moral certainty.” Penal Law § 155.05 (2) (d) “imposes a heavy burden and is designed to insure that the trier of fact does not attribute criminal liability to conduct which constitutes mere breach of contract or nonperformance.” People v Smith, 161 AD2d 1160, 1161 (4th Dept 1990).

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