To successfully bring a breach of contract claim, the plaintiff needs to establish that there is a valid contact between the parties.
Contract disputes arise in many types of business relationships. Whether the transaction is individual to business, business to business, or between two individuals, commercial litigation often arises from an agreement between two parties. A dispute indicates that at least one party believes that the other has failed to perform their duties. There are times when both parties claim that the other failed to perform and is liable. A breach of contract lawsuit may then arise.
1. The Four Elements of a Breach of Contract Claim.
The plaintiff in a breach of contract case has the burden to prove the following four elements:
- The parties entered into a valid contract
- The plaintiff performed all its obligations or has a justification for not performing.
- The defendant has failed to perform.
- The plaintiff has damages as a result.
The plaintiff must prove this by the preponderance of the evidence.
2. Existence of a Contract
To successfully bring a breach of contract claim, the plaintiff first needs to establish that a contract was formed between the parties. This basically means that:
- One party extended an offer and the other party accepted it.
- Consideration (usually money) was exchanged.
- The parties have standing to enter into the contract.
- The contract does not violate the law
3. Performance by Plaintiff; Nonperformance by Defendant
Next, the plaintiff must prove that the other party failed to perform its duties under the agreement and that the plaintiff performed its obligations or had an excuse for not performing. One possible excuse could be that defendant prevented the plaintiff from performing. Another possibility is that the plaintiff's performance was contingent on the defendant's performance, which did not occur.
4. Loss by the Plaintiff
The breaching party's failure to perform must have caused harm to the plaintiff. There are usually monetary damages. There are times when the damages are listed in the contract, called liquidated damages.
If the plaintiff succeeds in proving these elements, the plaintiff said to have presented a prima facie case. The defendant will then have to provide defenses.
In New York, most breach of contract cases under $25,000 can be brought in civil court. Disputes over $25,000 must be brought to Supreme Court. There are certain instances when a breach of contract claims can be commenced in Federal Court. I am admitted to the Federal Court of the First and Second Department.
If you are involved in a breach of contract dispute, feel free to set up a virtual consultation.