If you do business in Massachusetts you have, in all likelihood, entered into a contract at some time. In the event a party breaches a contract, you must take action to enforce your rights. Breach of contract cases can be complicated, but an experienced Massachusetts contract lawyer can guide you through the process.
A. Elements of a Valid Contract
A contract is a voluntary, legally enforceable promise between two parties to perform some legal act in exchange for consideration. In Massachusetts, there are certain elements that constitute a valid, enforceable contract. They are:
- Offer: An offer is made when the offeror (the person offering) puts forth certain terms that can be accepted. A person becomes an offeror if a reasonable person would believe that communication can be accepted to form the basis of a promise or agreement. For example, if John says, "I will sell you this car for $3,000," an offer has been made that can be accepted, as the terms are certain and a reasonable person could accept that offer.
- Acceptance: Acceptance is a desire to agree to the terms of an offer. Acceptance of a contract can be by words or deeds, but generally, the acceptance must be for the same terms as contained in the offer. Following the previous example, if you say to John, "I will pay you $3,000 for the car," you have accepted the offer. If instead, you say, "How about I pay $2,800 instead?" then you have not accepted, but instead have created a "counter-offer."
- Consideration: Consideration is anything given in exchange for an offer. In the previous example, the consideration is the payment of $3,000 in exchange for the car. In contracts for services, the consideration is the obligation to perform some tasks a person is not otherwise legally obligated to perform.
All essential terms of a contract must be certain and definite to demonstrate the parties' intent, otherwise, the contract may be held invalid.
B. How Parties May Be in Breach
There are many ways for a party to be in breach of a contract. Many of these will be specific to your contract and circumstances, so the assistance of a qualified Massachusetts contract attorney can help. Some common ways parties may be in breach are:
- Non-payment for goods or services rendered
- Defective work performed by an obligated party or defective goods sold
- Failure to provide goods or services in a timely manner
- Breaches of express or implied warranties
- Breaching party performed an act he or she was expressly forbidden to perform under the terms of the contract (i.e., non-competes, employee conduct contracts)
The plaintiff in a breach of contract case must prove that the defendant failed to perform in accordance with the contract, and must do so with "substantial certainty" in identifying the term that was breached. The plaintiff must also prove that the breach created actionable damages.
C. Potential Remedies for Breach of Contract
The possible remedy for a breach of contract depends both on the nature of the breach and the desired outcome for the case. Depending on the specific facts of your case, you may seek the following remedies:
- Money Damages: This means that you seek to be financially compensated for the breach of the agreement. This can include compensatory damages, consequential or incidental damages, and lost profits. Liquidated damages may be included in the contract. This is a specific amount of damages or a particular way in which damages are to be established. Liquidated damages clauses are highly scrutinized and you should consult an attorney when writing or signing a contract which includes them.
- Reformation: This happens when certain changes are made to a contract to facilitate compliance with the contract terms.
- Rescission: Rescission is the cancellation of the contract and return of any money so as to put the parties in a position as if the contract had never been performed.
- Specific Performance: This remedy requires the breaching party to comply with the terms of the contract. This is especially prevalent in real estate purchase contracts because the property is so unique that financial compensation may be inadequate to protect the non-breaching party's rights.
Defenses to a Breach of Contract Case
If you should find yourself the defendant in a breach of contract case, there are certain common defenses that may apply to your situation. These include, but are not limited to:
- Waiver: A party can argue that a party conducted itself in a manner that acquiesced to or accepted the breach, thereby waiving any argument against it.
- Statute of Limitations: The statute of limitations for a breach of contract case depends on the type of contract at issue. Any case filed after that time may be dismissed.
- Illegality: The purpose of the contract was illegal in some way, and is therefore unenforceable.
- Incapacity: If a party does not have the capacity to enter into a contract (i.e., a minor, mentally incompetent person) then that contract cannot be enforced against them.
- Statute of Frauds: Certain contracts must be in writing and signed by the party against whom enforcement is sought, such as contracts for the sale of land, marriage contracts, surety contracts, and contracts not to be performed within one year.
D. The Legal Process - How to Enforce Your Contract
If you want to enforce a contract that another party has breached, you have options. An experienced Massachusetts contract lawyer can first help you to attempt to negotiate a resolution to your problem. If the problem can be settled before a court case is filed, it will save you time and money so you can get back to performing your business and living your life. Cases may also be resolved through arbitration or mediation which are more formal than negotiation but provide an alternative to litigation.
Often, however, negotiation is insufficient and a civil complaint must be filed. Your attorney will file the complaint in the appropriate court depending on your circumstances and for the amount of money in controversy. At that point, the legal process begins and the defendant must file an answer. If you are ultimately successful in your case, your attorney can help you to:
- Enforce the specific terms of the contract;
- Obtain and enforce a lien on the defendant's property to ensure collection of your judgment;
- Handle any appellate filings if necessary;
- Reform the contract to ensure future compliance; and
- Provide advice on how to prevent a future breach of contract issues.
Your work and your life are too important to allow a party to breach its contract with you. If another party fails to comply with a contract you need to take action to protect your legal rights. The attorneys at the Katz Law Group can effectively protect these rights and help ensure against breaches in the future. Please feel free to call us at 508-480-8202 or contact us on our website.