As a business owner or manager, you've likely encountered situations where you've contracted
with another business for goods or services, but the goods or services weren’t appropriately
provided. This article is designed to equip you with the knowledge you need to handle a
suspected breach of contract.
An Oral Contract vs. a Written Contract
If you don’t have a signed and written contract, that does not mean you cannot recover for a
breach of contract. It's crucial to understand that a contract can be established by the parties'
conduct, an exchange of invoices and purchase orders, an exchange of emails, and other similar
actions. Whether there was an agreement depends on the facts of each situation. Even if you
can’t establish the existence of an agreement, the law may still allow you to recover for actions
taken in reliance on certain promises or for fraud. These points are important to consider when
entering into agreements or when assessing your options after you believe an agreement has been
breached.
Material vs Immaterial Breach of Contract
The law sometimes distinguishes between a material and immaterial breach. The law in this area
can be complicated and will depend on the facts and circumstances of each case. For example, if
your vendor is providing you with the contractually agreed upon widgets, but their delivery
people are not as friendly as they once were, you may not have a breach of contract. If they
aren’t as friendly and deliver the widgets later than they are supposed to under the contract, you
may have a breach of contract that is worth pursuing if their late delivery is causing you to lose
sales or increase your costs. Again, it depends on whether the action or lack of action by the
other party is material to the promises exchanged by the parties. See our article on this issue by
clicking this link:
Failure to Perform
To prove a breach of contract, you must show (1) there was a contract, (2) you performed your
obligations under the contract, (3) the other party failed to perform, and (4) the non-performance
damaged you. See our article on this issue by clicking this link:
As step one, you should review the language in the contract to ensure there is a breach. For
example, even if the other party usually delivers the widgets by a certain date, the agreement
may allow them more time. Additionally, although the developer may take longer than estimated
to complete the project, the contract may provide wiggle room.
Determining whether a breach has occurred is often easier when the other stops responding to
calls and emails. For example, if you performed the services you promised but the other side has
stopped responding to requests for payment, it is likely that you can begin a suit for breach of
contract. In fact, many breach of contract lawsuits are just efforts by the plaintiff to collect a fee
or payment for a good or service they provided but were not paid for.
Each situation and breach is different, and you should contact a lawyer as early in the process as
possible to help guide you to a favorable resolution. Here at King & Jones, we can help guide
you in that process. We have over 40 years of experience litigating all types of breach of contract
cases as well as helping clients negotiate a resolution to contract disputes before they have to file
a breach of contract lawsuit.