Orlando Breach of Contract Lawyer – We Resolve Breach of Contract Disputes

A Breach of contract is technically a legal conclusion. When one party fails to meet their obligations or duties under a contract they are said to be in breach of contract. Often both sides will accuse each of being in breach of contract.

If a court rules that there has been a breach of contract, according to Florida law, it will also have to make a ruling on the remedy for the breach. Typically the remedy is the payment of monetary damages. However, depending on the circumstances the court has the authority to order other remedies as well.

One of the best things to do when you believe the other side has breached the contract or you have been accused of being in breach of contract is to contact an Orlando breach of contract lawyer. A breach of contract lawyer can help you understand your options for dealing with the potential breach.

Having a small business attorney that knows your business review the contract, for potential issues, prior to signing, will reduce the potential for future contract disputes and unintentional breaches. If a dispute does arise, working with a good contract lawyer can resolve the dispute prior to litigating it in court.

What Happens When One Side Breaches the Contract

When there is a breach of contract, the side that has been injured has several options. If the breach is minor, they could just ignore it and move on, trying to keep the business relationship intact. However, failure to assert your rights under the contract could limit your ability to seek legal enforcement of the contract later on because a court could find that your previous lack of action essentially amended the contract.

Another option is to try and renegotiate the contract. If the breach was because of some change in the business circumstances of the other side, a renegotiation may help both sides reduce the costs of litigating the breach of contract and allow both sides to continue benefiting from the commercial relationship.

A business may decide to pursue damages for the breach of contract. Instead of running directly to the courthouse, most businesses will make a written demand for damages. Sometimes the sides can work out a settlement. But, if there is a major dispute over the proper amount of damages, or even if there was really a breach of contract or not, the two sides will most likely end up in arbitration or court to resolve the issue.

How a Contract Lawyer Can Help You in a Contract Dispute

Contract lawyers are not just for when you are determined to go to court. Contract lawyers are also helpful in negotiating a settlement and avoiding expensive litigation. The sooner a lawyer can be brought in when there is a suspected breach of contract the better. A contract lawyer can analyze the agreement, confirm if there has been a breach, and make suggestions for how to go about solving the issue.

Often the best way to avoid a lawsuit is to convince the other side that they would lose if a lawsuit was to be filed. Once one side claims there was a breach of contract, all the negotiations are done in the shadow of the courthouse. This means that both sides must decide what the risks and costs are of going to court when they are deciding whether or not to accept a settlement offer.

If it seems likely that litigation will be needed to protect your rights and to enforce the terms of the contract, a lawyer can help prepare you for the litigation be conducting an investigation, gathering evidence, and developing a record of settlement attempts. If you are the one accused of being in breach of contract, a skilled lawyer can also help plan your defense and push back against the accusations being made against you by the other side.

Understanding the Different Types of Breaches of Contract

There are three main types of breach of contract. They are:

  1. Material breach
  2. Non-material breach
  3. Anticipatory breach

Courts treat each type of breach of contract differently. You will want to understand what type of breach of contract you are dealing with before you make any decisions about the best way to move forward. A Florida contract lawyer can help you by analyzing the contract and categorizing the breach.

If you are not able to resolve a contract dispute and plan on pursuing litigation, you will need to make sure that you bring your lawsuit in the proper time. Florida has a different statute of limitations for oral and written contracts. You will want to discuss the timing of the breach with a contract lawyer as soon as possible to make sure you are able to preserve your legal rights.

Material Breach

A material breach of contract happens when one side fails to perform their duties as it relates to a major part of the contract. The purpose of the contract is defeated by the failure of one side to fulfill their duties.

If one side has committed a material breach of the contract, the other side is not legally obligated to fulfill their duties under the contract. In some circumstances a material breach is clear. If one side fails to deliver the promised goods in a sales contract, this is a material breach and the other side is not expected to make a payment for the never-delivered goods.

However, in many cases it is unclear whether or not a particular action is truly a material breach. It is possible that the purpose of the contract could still be fulfilled. Sometimes these close calls can be avoided in the drafting stage of a contract by specifically stating that failing to meet certain specific duties will be a material breach of the contract.

A material breach of contract entitles the non-breaching side to sue for damages incurred because of the breach.

Non-Material Breach

A non-material breach of contract happens when one side fails to meet their contractual obligations as it relates to a minor part of the agreement. A non-material breach does not get to the heart of the contract.

If there is a non-material breach, the other side will still have the legal right to pursue compensation for any actual harm caused by the breach, but the non-breaching side is not excused from performing their obligations under the contract.

A material breach stops the contract. But, the contract continues on when there has only been a non-material breach.

Often one side will claim that the other side committed a material breach and will stop performing their duties. The other side will claim that there was only a non-material breach and that the other side is the one the committed the material breach by stopping their performance.

This is one reason why it is critical to get the analysis of a contract lawyer when there is any hint of a breach of contract. Often the difference between a material and non-material breach will be a technical matter. But, millions of dollars could hang in the balance based on the analysis of the breach.

Anticipatory Breach

Anticipatory breach of contract, also known as anticipatory repudiation, happens when one of the parties to the contract declares in words or actions that they do not intend to meet their obligations and duties under the contract.

When there has been an anticipatory breach that deals with a major part of the contract, it excuses the non-breaching side from performance and allows them to begin legal action immediately, instead of having to wait for the term of the contract to be fulfilled.

However, if the anticipatory breach only deals with non-material part of the contract, the non-breaching side must still honor their contractual obligations. They will be entitled to sue for damages resulting from the non-material breach, if any.

Dealing with anticipatory breach can be tricky. One side can retract their anticipatory breach if the other side has not made any changes in reliance on the statement of breach.

If you stop performing your obligations under a contract because you believe the other side committed an anticipatory breach, but a court later finds there was no anticipatory breach, you could be found to be in breach of contract.

How a Court Determines if There Has Been a Breach of Contract

When two sides are unable to resolve a contract dispute and the case goes all the way to a trial, one of the first things the court must decide is if there has been a breach of contract according to Florida law.

A breach can be found in two ways. One side may admit to having committed a breach of contract and simply want the court to decide the proper damages. The other possibility is that one side must prove to the court by a preponderance of the evidence that the other side breached the contract. The preponderance of the evidence means that it is more likely than not that the one side failed to meet their obligations under the contract.

In order to convince a court that there has been a breach of contract you will have to prove:

  • That there was a valid contract under Florida contract law
  • What the specific duties of the breaching party were
  • That the breaching party failed to meet those duties

The other side may have some defenses to justify their breach of the contract. They will have the burden of proof in showing the circumstances warranted the breach of the contract.

A court will also need to determine if the breach was a material or non-material breach.

In making all of these determinations, the court will first look to the language of the contract, if it is a written contract, and then to the actions of the parties.

Consequences of a Breach of Contract

The primary consequence for a breach of contract is that the side that commits the breach becomes liable for the damages caused by their failure to meet their obligations.

Under contract law, the breaching party will be required to make the other part whole. This usually means the payment of monetary damages, but it can also mean other things as well. In limited circumstances a court could order the breaching side to fulfill their duties. This is called specific performance.

The liability will be different depending on if the breach was a material breach or a non-material breach. The court will also look to the actions of the injured party when determining the appropriate amount of damages.

Remedies for a Breach

A remedy is the action a court orders the party that breached the contract to take in order to make the other side whole. There are two categories of remedies: legal remedies and equitable remedies. These two categories have their roots in the ancient English common law system. At that time there were different courts with different types of powers.

Most courts that will hear a Florida contract dispute have the power to order legal or equitable remedies. However, the most common remedy is the payment of monetary damages.

Equitable remedies for breach of contract include:

  • Specific performance
  • Injunction
  • Rescission
  • Restitution

Legal remedies for breach of contract include:

  • Compensatory damages
  • Punitive Damages

Damages Due to a Breach

In most contract disputes the most efficient way to make the injured party whole is to award monetary damages. Most of the time compensatory damages are awarded. As the name suggests, compensatory damages pay for the harm done to the other party. If because of the breach of the contract a company had to buy more expensive supplies or to pay to have parts rushed to avoid any issues, a court can order the side that breached the contract to pay for these extra costs. These straightforward damages are also called general damages. They include all of the direct costs incurred by the non-breaching party as a result of the breach of contract.

There is a second type of compensatory damages known as special damages. Special damages are much less frequently awarded. Special damages include payment for all things that were a direct result of the breach of contract, but came about because of special or unusual circumstances. These circumstances would be something that is not ordinarily predictable, but that the breaching party was aware of.

Here is an example of special damages:

A homeowner has to have their house painted by a specific date or else be fined by the neighborhood homeowner’s association. They enter into a contract with a painter and they tell the painter they need the house painted by a specific date or else they have to pay the fine.

If the painter breaches the contract by failing to paint by the correct date, they will be liable for the special damages of the fine by the homeowner’s association.

In addition to compensatory damages, a court can ward punitive damages. However, courts rarely award punitive damages in a breach of contract case. Punitive damages are not designed to compensate the non-breaching side. Punitive damages are designed to punish the breaching side for particularly bad behavior.

There usually has to be deliberate or reckless conduct that results in personal harm before a court will award punitive damages.

What is Specific Performance?

In some cases monetary damages cannot make the injured party to the contract whole. When legal damages are not sufficient the court can turn to equitable remedies. Specific performance is a type of equitable remedy where the court orders the side that breached the contract to perform a specific duty under the contract.

Specific performance will only be ordered when the subject matter of the contract is unique. Land disputes are the most frequent area where specific performance may be ordered. However, specific performance may also be appropriate when the dispute is over a family heirloom or a piece of art. Sometimes antiques are also said to be unique enough for specific performance to be a fair remedy.

Specific performance cannot be ordered in the case of personal services. A court will not order a painter to paint a house or a writer to complete a book. Doing so would violate the Constitutional prohibition of involuntary servitude.

Defenses to a Claim of Breach of Contract

Not all breaches of contracts are the same. Sometimes, a breach of a contract can be justified. There are several defenses to the breach of a contract. The main defenses are:

  • Mistake
  • Fraud
  • Duress
  • Unconscionability
  • Lack of Consent
  • Impossibility or Impracticability
  • Frustration of Purpose
  • Statute of Frauds

Another defense to a breach of contract claim is that there was never a contract. The plaintiff in a lawsuit will have the burden of proving that a contract existed. But, the other side could specifically allege that one or more components of a valid contract were missing from the deal. This would mean the deal lacked a mutual agreement or adequate consideration. Where there is no contract there can be no

If a contract dispute heads to trial if you want to claim a defense to the breach of a contract you have to make the claim early on and you have the burden of proving that your actions meet the legal requirements for the defense to be effective. Sometimes these types of defenses are known as affirmative defenses because they have to be raised at a specific time in the legal proceedings, long before the actual trial begins.

Mistake

Because a contract requires the two sides to come to a “meeting of the minds” if both sides of the contract were mistaken about the key facts the contract is based on, there may never have been a true contract formed. When both sides were under the same mistake it is called a mutual mistake.

If one side is under a mistaken impression, this is called a unilateral mistake. Usually, a unilateral mistake is not a defense to breach of contract. The primary exception is when the other side is aware of the mistaken understanding and remains silent, allowing the contract to move forward based on the mistake. In circumstances where the other side knew of the mistake, the court may excuse the mistaken party’s breach.

Fraud

Fraud is related to mistake. If one side induced the other into entering a contract through dishonesty, trickery, or other form of fraud, a court will excuse the defrauded side from performing their duties under the contract.

The idea of fraud as a defense is once again tied to the concept that a true contract cannot be formed unless the two sides agree on the underlying facts of the deal. If one side lied about the facts or somehow misled the other party, there was never a true “meeting of the minds”. This means there was never actually a contract. One side cannot have actually breached the agreement because there was never a true agreement in the first place.

Sometimes fraud is also used as a counterclaim in a contract dispute. The side that was defrauded asks the court to award it damages from the harm it suffered as a result of the dishonesty. However, fraud when used a defense to a breach of contract is different than when used as a counterclaim.

Duress

Duress is another defense that looks at the mindset of the parties entering into the contract. If you force someone to sign a contract under some sort of threat, they cannot be said to have voluntarily entered into a deal. There is no true contract present.

When raising the defense of duress, the nature of the force used to compel one side to enter into the contract is important. A threat of physical harm will most likely be considered duress. But, not all threats will rise to the level of duress. If during negotiations one side threatens to sign a deal with a competitor unless the other side gives in on some key point, that contract is not made under legal duress.

For duress to excuse performance of a contractual duty, the duress must essentially deprive the party of their agency, or ability to choose.

Duress is a high legal standard.

Unconscionability

Unconscionability is the idea that the terms of the contract are so one-sided that they are unjust. It is common for one side in a contract negotiation to have more power than the other side. But, these ordinary situations do not rise to the level of unconscionability.

To qualify for this defense the contract must be so unjust that no reasonably informed person would ever consent to the terms. Courts will often look at the situation of the parties when examining a contract for unconscionability. It will consider factors such as age, bargaining power, mental capacity, and the availability of other options.

If a contract is found to be unconscionable, it is unenforceable. However, courts are usually reluctant to make a finding of unconscionability in commercial contracts.

Lack of Consent

Because a contract is dependent upon the two parties reaching an agreement, the inability of one side to consent to the deal would make the contract voidable.

Lack of consent includes everything from mental capacity to the age of the parties. Someone under 18 cannot consent to a contract. Someone who is inebriated may be incapable of entering into a contact.

But, in the commercial setting the concept of consent often comes down to the authority to enter into a contract for an organization. Companies enter into contracts. They are legal persons. However, a company itself cannot sign a contract. Instead an authorized representative must enter into, and sign, any contracts of the company’s behalf.

If someone is not an authorized representative they cannot enter into a contract that binds the company. The company cannot be said to have consented to a contract that was signed by someone acting without the proper authority.

Impossibility or Impracticability

When it is objectively impossible for anyone to perform the duties of the contract, one side may use the defense of impossibility to excuse performance. This is sometimes known as absolute impossibility. However, this defense cannot be used if the party is the one that caused performance to be impossible.

Impracticability means that while performance is technically possible, it extremely difficult for the party to perform, even if another party could perform those same duties.

These defenses are very fact specific. Courts usually require extreme circumstances to excuse performance of contractual duties because of impossibility or impracticability.

Frustration of Purpose

In order to qualify for the defense of frustration of purpose, there must have been an unforeseen event that severely undermines the original justification for entering into the contract. Often, frustration of purpose comes from changes in governmental rules or regulations. But, almost any event can be the basis of a frustration of purpose defense so long as:

  • The event was unforeseen by the parties
  • The event was caused by a third party or outside force
  • The event makes performance of the contract contrary to the original understanding of the parties

Statute of Frauds

The law requires certain types of contracts to be made in writing to be valid. This is known as the statute of frauds. Land contracts must be in writing to be enforceable. If someone makes a claim of breach of contract, the statute of frauds may be a defense if the contract was not in writing when it should have been. The contract then becomes unenforceable.

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Walsh Banks Law is a boutique law firm located in Orlando, Florida. We specialize in business law, real estate law and commercial litigation.