Business Litigation FAQs

California’s Civil Code, section 1549 provides: “A contract is an agreement to do or not to do a certain thing.” Courts have defined the term as follows: “A contract is a voluntary and lawful agreement, by competent parties, for good consideration, to do or not to do a specified thing.” (Robinson v. Magee [1858] 9 Cal. 81, 83.)

A breach of contract is when one or more parties fail to perform the agreement entered into prior to the performance of the specified thing.

Breach of contract claims take on many forms. Some examples include a simple failure to pay for a product of service provided; a product that fails to perform as promised; a failure to perform a service promised for a specific price; or performing an act that was prohibited under contract. Most often claims for breach of contract arise because the person or entity accused of breaching a contract caused monetary damages to another party to the contract.

A Lawsuit May Not Be Needed

Many breach of contract claims are resolved without the need for lawyers and litigation because the parties to the contract realize that they can rearrange their contract by some alternative level of performance that is acceptable. For example, Business A sells 100 widgets to Business B, which agrees to pay $3,000 in 30 days following delivery. The widgets are delivered but after 30 days, payment has not been made. Business B has breached its contract by failing to pay under the terms of the agreement. Business B informs Business A that it can not pay within 30 days but will have payment within 60 days. Payment is made in 60 days and Business A agrees to accept this performance.

While there was a breach, there was an accord and satisfaction of that breach. The two businesses avoided a lawsuit because they worked out their differences. Thousands of businesses each day in California make contracts, breach contracts, modify the terms, and then resolve their differences.

However, there are many that cannot resolve their differences and must seek an attorney to help them collect damages under a breach of contract theory. California law states that a breach of contract claim is proven if the evidence supports the following findings:

1. That the plaintiff (this is the person suing) and the defendant (the person being sued) entered into a contract;
2. That plaintiff did all, or substantially all, of the significant things that the contract required him to do or that he was excused from doing those things;
3. That all conditions required by the contract for defendant’s performance had occurred;
4. That the defendant failed to do something that the contract required her to do; and
5. That plaintiff was harmed by that failure.

If you have a claim against another individual or company that you believe meets all these evidentiary elements, you may wish to consult an attorney to review your case and see if you have a legal claim to recover damages from a breach of contract. David H. Ricks & Associates handles many types of breach of contract cases in California’s Inland Empire. These cases can range from collection matters, trade secret violations, employment contract disputes, construction disputes, and performance issues to complicated and technical breaches of agreements.

Call 909-481-5856 now to discuss your breach of contract case with an attorney from David H. Ricks & Associates, or submit a description of your case through this website. David H. Ricks & Associates handles California breach of contract cases in all of the Inland Empire.

This is probably one of the most often asked questions of me when I start my review of a breach of contract case.

Whether a case proceeds to litigation often depends on the ability to recover the cost of attorney’s fees from the opposing party. I often see businesses or individuals that are owed $20,000 or less from someone who did not pay for the services or did not pay on a loan. Securing the recovery of this money may be critically important to the financial success of the business or individual. In these situations, adding the cost of legal fees to the monthly expenses is burdensome and difficult to cover while a collection lawsuit is ongoing. So what they want to know is whether that extra expense for legal fees going to be paid by the defendant when collection of the judgment is secured.

In California, what is known as the American Rule is applied to all lawsuits unless otherwise modified by contract or statute. The American Rule states in essence that each party to a lawsuit must pay his own attorney fees regardless of who wins the lawsuit [Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504]. In the very early days of the State of California, the legislature determined that the American Rule would apply. The Code of Civil Procedure section 1021 states: “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties…” This code has always allowed contracting parties to negotiate the recovery of attorney fees to the prevailing party. Also, since the enactment of the American Rule, several laws have been enacted that have provided the recovery of legal fees to the prevailing party in a lawsuit.

So the answer to the question to the question depends on whether the contract provides for the recovery of legal fees, or whether some law states that a prevailing party will recover attorney fees. So looking to the contract first, and to the law second will answer the question for your specific circumstances. Consulting with a good contract litigation attorney, such as David H. Ricks & Associates, can help you find out the answer to your breach of contract question.