Breach of Contract
Orange County Breach of Contract Attorney
A contract is a legally binding agreement between two or more parties. A contract may be written or oral but depending on the subject matter certain terms of the contract may need to be written.
Contracts for services are governed by the common law developed in California. In a breach of contract dispute the court calculates contract damages based on the cost to complete or diminution in value.
The cost to complete valuation requires that the breaching party pay damages to replace or complete the project based on the terms of the original contract. This method is generally appropriate where the breaching party failed to complete a project or provided poor quality workmanship.
The diminution in value approach requires the breaching party to pay the difference between the value of the project under the original contract terms, and the value of what was actually provided. This method is appropriate if the breaching party has performed a significant amount of work on the contract, or if the cost to complete damages would cause the breaching party to suffer a grossly disproportionate loss as compared to diminution in value damages.
Contracts for the Sale of Goods
Division 2 of the California Commercial Code governs the transactions for all sales of goods. The law for breaches of contracts for the sale of goods can differ markedly from that for services or construction. The remedy for a breach of contract for the sale of goods is the difference between the fair market value of the goods at the time of sale and the contract price for the goods.
Contracts generally specify a time for performance; late performance is usually not a breach of contract that would allow the other party to be excused from performance. However if time is of the essence late performance will be considered a material breach of contract that can give rise to damages or cause the cancellation of the contract.
Anticipatory Breach of Contract
When one party communicates to another that they will not perform the contract, the contract can be considered breached at the time and the aggrieved party may take remedial action to mitigate damages and bring a lawsuit to recover damages for a breach.
Additionally, sometimes one party will learn of circumstances that make casts doubt on the ability for the other party to perform their end of the bargain. In these situations if one party has reasonable belief that the other party may not be able to perform that party may request adequate assurances that the other party will perform. For example, in a contract for the delivery of equipment, if the manufacturer finds out that the buyer’s company has lost significant money through bad investments it would give reasonable cause to doubt the buyer’s ability to pay.
In this situation the manufacturer would have the right to demand adequate assurances that payment will be given at the time of delivery of the equipment. If the buyer failed to respond in a specific time frame the manufacturer could treat the contract as breached. The time frame with which a party must respond depends on whether the contract was for services or goods.
Contact an Experienced Orange County Breach of Contract Attorney
Contract law is complicated and requires an experienced attorney to navigate. The Law Offices of Tony T. Liu provides experienced representation for both contracts for services and sale of goods. Schedule a consultation with a breach of contract legal expert today call (714) 415-2007.