San Jose Business Lawyers Blog
Business law frequently consists of contractual relationships. Contracts between business owners, shareholders, employees, clients, and vendors are the very bones on which many businesses are formed. A single breach of contract litigation case in California, like a single broken bone, can cripple your entire business. For this reason, California law permits businesses to recover monetary damages for a breach of contract. Some damages are available by statutory law while others are specified in the contract. Strong business contracts can make or break your company. While you can’t prevent a breach of contract, you can often design contracts to maximum your position.
Litigating a Breach of Contract Case with a Los Angeles Litigation Attorney
California Breach of contract litigation can get complicated, but a plaintiff Los Angeles Litigation Attorney must prove the following basic elements:
- That the parties to the litigation entered into a binding contract. This can be written, oral, or implied-in-law depending on the agreement.
- That the plaintiff performed all or substantially all of its obligations under the contract.
- That the defendant had an affirmative obligation to do something or not to do something as specified by the contract.
- That the defendant did not adequately fulfill its obligations under the contract, and that
- As a result of the breach of contract, the plaintiff suffered harm. This harm need not be financial, provided that the harm is real and substantiated. Damage to business reputation, loss of trade secrets, or loss of future prospects may be claimed.
You will not succeed on a breach of contract claim if you haven’t suffered any damages. For example, you entered into a two-year employment contract with Robert, who quit after six months. You turn around and hire Denise, who turns out to be a better hire than Robert. You’re actually in a better position because of Robert’s breach, so you likely won’t succeed on a California breach of contract claim.
Contractual Damages for Breach of Contract Claims
After a breach of contract, the wronged party may be able to recover:
- Actual damages, such as lost profits or value.
- Anticipated future damages.
- Incidental and consequential damages.
- Attorneys’ fees, if specified in the contract, and
- Litigation costs.
Sometimes the damages associated with a breach of contract are difficult to ascertain. This may occur when the contract involves future business partnerships and endeavors. In such cases, the parties may agree to include a “liquidated damages clause.” This sets the monetary damages the breaching party will owe in the event of a breach; however, the damages can not be arbitrary. The parties must use some reasonable method of setting liquidated damages at an amount likely to reflect actual damages. Liquidated damage clauses cannot “punish” a breach, as punitive damages are not available for breach of contract claims.
Protect Your California Business by Hiring a Contract Litigation Attorney Today
From drafting and reviewing business contracts to breach of contract litigation, the experienced California business litigation attorneys at Structure Law Group, LLP are here for all your business needs. To schedule a contract litigation consultation, call our San Jose office today at 408-441-7500 or contact us online.