You thought you had a deal, but if you did, why do you have nothing to show for it? As a lawyer who has tried many contract lawsuits, I get asked the question quite often as to whether a contract was made, and if it was, was it breached? Well, let’s look at the basics.
A contract can be oral or written. With a few exceptions where the law requires it to be in writing, an oral contract is just as binding. With that said, the written word often relieves you of the burden later of proving your words are more dependable than the one who swears there was no contract. Like many disputes, lawsuits over contracts will arise when the parties to the contract fail to agree as to the basic terms of agreement, or as is often, whether a contract was made and on what terms. Thus, the written contract is the first step to helping you prove your case in court, be you the plaintiff or defendant.
So, what exactly are the basic elements to making a contract? The required elements are:
- There is an offer made;
- There is an acceptance of the terms of the offer;
- There is a meeting of the minds between all parties as to the specific details and terms of the agreement;
- Each party has communicated their consent to be bound by the terms of the agreement;
- There is consideration given by the parties to the contract; and if it is a written contract
- There is execution and delivery of the contract with the intention that the contract will be a mutual and binding document for all parties.
With those being the required elements, you can see how an oral contract can run into a swearing match – and ultimately be unenforceable – if an important part is left to the spoken word as opposed to putting it in writing. Regardless, lets assume the foregoing elements are met. What happens when someone fails to carry out their obligations? In other words, what is a breach of contract, and what are the remedies for the the same?
Once you have established – or at least convince your attorney – that a binding contract existed, you can then take the steps in court to be compensated for your loss. This is where a trial lawyer comes into play if the stakes are high enough to justify the expense of proceeding to court. Assuming that is the case, the basic elements to a lawsuit over a contract are:
- Existence of a valid contract;
- Plaintiff performed or tendered performance;
- Defendant breached the contract, i.e. failed to carry out the duties in accordance with the terms; and
- Plaintiff was damaged by the breach.
Most breaches of contract are pretty simplistic, but that really depends on the basics of the contract. Contracts between businesses, however, are often complex, and a breach of contract lawsuit in such instances can be extremely difficult to prove from both sides of the dispute. It is beyond the purpose of this article to delineate all of the intricacies of a complex breach of contract case, but just keep in mind the basic elements as set forth above. Also, know that money is not the only recovery that a plaintiff can seek, although it is the most common, especially when the plaintiff has parted with money as part of his/her duties. There are instances where performance – such as property to be deeded over as agreed – is more important to the plaintiff and is the ultimate relief sought. And like most lawsuits, the plaintiff will have to meet their burden of proof, and defendants are just as entitled to be in the courtroom defending against what they believe to be unmeritorious claims by the plaintiff. If the facts justify it, defendants can often countersue and become a plaintiff themselves, seeking recovery against the original plaintiff.
Also know that a breach of contract action is one of the limited number of lawsuits where a successful plaintiff can recover the reasonable and necessary attorney’s fees incurred to bring the lawsuit, including if the judgment is appealed. Even though a plaintiff may have to pay for the lawsuit as it is prosecuted, if the plaintiff believes strongly in the case and has the financial means to proceed, it is of comfort knowing that he/she may be reimbursed for those fees in addition to recovering the damages owed them. Additionally, if the stakes are significant and the case looks strong, the attorney may agree to take the case on a contingency basis, where the attorney is paid only if the plaintiff recovers by settlement or judgment. Be sure and speak to the attorney about taking the case on a contingency fee basis if that works best for you.
Finally, in Texas the Statute of Limitations for bringing the breach of contract lawsuit – the time period within which you must sue or you will be forever barred from bringing suit – is four years from the date of the breach. Now, there may be exceptions that keep the time period from barring your lawsuit, and your attorney should be able to advise you in that regard. Additionally, the limitations period will be unique to the various states. For instance, the basic rule in Oklahoma is five years for a written contract lawsuit, but only three years for an oral agreement. So, it is best to act quickly so that you may protect your rights.
If you have any questions, my initial consultations is without charge. Feel free to give me a call.
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