Contracts and Navigating a Breach of Contract Claim

On a Breach of Contract cause of action you have to show the following:

  1. That you had a contract.
  2. That you performed according to the contract.
  3. That the defendant breached the contract (usually by not paying the money due)
  4. And that you have been damaged as a result in the total sum as per the contract

A valid contract exists when:

  1. There is an offer which contains all of the material and specific terms
  2. That offer was accepted by the defendant and
  3. There is valid consideration for the agreement.

Breach of Contract claim may fail for numerous reasons such as:

  1. There was not an actual agreement on the price of services rendered.
  2. There was not an actual agreement on quantity
  3. There was not an actual agreement on the scope of services
  4. There was not an actual agreement on the term of the agreement
  5. You cannot prove your damages or your damages are not directly (proximately) caused by the defendant’s alleged conduct
  6. You cannot show that a modification to an agreement was in writing.
  7. You cannot show that the defendant specifically authorized your services
  8. You don’t have a signed contract
  9. There was no legal consideration for the contract/agreement

However, all hope isn’t lost if your Breach of Contract claim fails. You have at least two other options:

Unjust Enrichment Claim: This is an equitable claim. It says that even if there wasn’t a formal agreement (say because the price was not agreed to, or some other material term might have been missing that makes a Breach of Contract claim unsuccessful) you should still get paid for the reasonable value of your services because the defendant requested services from you, you relied upon that request, the defendant knew you were performing services and the defendant has retained the benefit of those services without paying you, and as such as been unjustly enriched at your expense. Unlike in a Breach of Contract claim, with Unjust Enrichment you have to show the reasonable value of the services performed. This means showing that your price and time spent were both reasonable under the circumstances. This is a more difficult task than a breach of contract claim but not impossible.

An Account Stated Claim: In New York, if you send someone invoices over a period of months, and they do not contest (or event admit) the invoices, you have an account stated claim which means you are entitled to the sum as stated in those invoices.

Conclusion: The key to any successful claim for money owed on a breach of an agreement, is organization.  Making sure your claim is organized is critical. Having all the proper documentation including (1) signed contracts (2) invoices (3) written demands for payment (4) written admissions that money is owed or you will get paid (5) supportive email/written correspondence, and (6) any other information showing you properly performed the services agreed upon will help to ensure your success.

1

Related Posts

Loans or Investors?

Determine the Funding and Capitalization of Your Business Your business plan should adequately address the funding requirements of your Company in order to get the Company off the ground and running. Funding can come…
Read more

Are You An Oppressed…

One of the most common claims amongst minority shareholders in a corporation is the "oppressed shareholder/member" claim. Essentially, one argues that their rights and expectations have been utterly defeated by…
Read more

FAQ’s: Forming a PLLC…

The following outlines the process and costs for creating a PLLC in New York: File Articles of Organization with the NY Department of State. Filing fee $235Obtain required consent from…
Read more