In businesses, both big and small, contracts are important in keeping them functioning. They make sure that promises are made and that obligations are met. Of course, one of the parties can dispute the terms and agreements of a contract, but those terms are right there in writing for everyone to see. Nonetheless, contract disputes do occur in business and when they do, they need to be resolved so that the business can keep functioning.
That is where a business contract lawyer comes in because they can help resolve disputes over contracts. At Hogan Hulet, we are business contract lawyers in Las Vegas with decades of experience helping businesses resolve contract disputes in their favor. If your company is experiencing a contract dispute and you want the best chance of it being resolved as quickly as possible and in your favor, then contact us at Hogan Hulet so that we can give you the help that you need.
Every business contract requires six elements for it to be enforceable in a court of law. The first three are an offer, an acceptance of that offer, and that each party must consent to their own free will. That means that neither party involved in the contract can be coerced into signing it and also that they must both agree to the same terms and conditions of the contract. The fourth element is consideration, which means that something of value was exchanged between the two parties. The thing of value can be either money, items, or services but it is the exchange that is crucial. The reason is that if one person receives something of value without giving something in return, then it is a gift, not a contract.
The fifth element is that both parties must be of sound mind. That means neither of them can be minors, they cannot be under the influence of drugs or alcohol when the contract is signed, and they must not have any mental or cognitive impairments. If one of the parties is deemed to be incompetent when the contract was signed, then it is invalid. The final element of a contract is that it must serve a purpose that is legal. So an official contract cannot be signed for the trafficking of drugs, the hiring of a hitman, or any other illegal activity.
It should be noted that there is a distinct difference between contracts and agreements even though both terms are sometimes used interchangeably. An agreement is a mutual understanding between the involved parties about their rights and obligations. A contract involves the same mutual understanding but it also involves creating enforceable obligations. In other words, a contract is official.
A breach of contract is easy to understand since it is when a party fails to uphold their end of the agreement stated in the contract. There are different kinds of contract breaches:
Material Breach - This is when one party fails to perform their contractual obligations or fails to fulfill them in a timely manner. In these cases the breach is so severe that it completely defeats the purpose of the contract, this is why a material breach is also called a complete breach.
Minor Breach - This is also called a partial breach or an immaterial breach. It is when a party meets the major obligations of their contract but fails to meet a minor one. An example is if a party promised to deliver a product at a certain date and time. If they delivered the product but did so a few minutes after the specified time, then this would be considered a minor breach. The party that suffered the breach can sue but only if they can prove that the breach caused them financial damages.
Actual Breach - An actual breach occurs when the contract has already been broken. That means one party has failed to perform their obligations, performed those obligations poorly, or failed to deliver them at the specified time.
Anticipatory Breach - This is when one party informs the other that they will not fulfill their contractual obligations.
When a contract gets breached, the party to whom the breach occurred has three different methods of relief under the law. They are damages, specific performance, and cancellation and restitution.
This is the most common method of resolving contract breaches and they offer the breached party financial compensation for the losses they suffered as a result of the breach. The following are some of the kinds of damages that can be awarded for a contract breach:
Compensatory Damages - These are meant to put the breached party in the position they would have been in had the breach not occurred.
Punitive Damages - These are meant to punish the breaching party if their breach was particularly egregious. In these cases, the party that violated the contract has to make payments well beyond compensatory damages. These kinds of damages are rarely awarded in breach of contract cases.
Nominal Damages - When a contract is breached but there is little loss of money to the party that experienced the breach, then a small amount of money is awarded to them.
Liquidated Damages - These are a specific amount of damages that are agreed upon by both parties at the time of the contract signing in the event that a party breaches their end of the contract. They are an estimate of the financial losses that a party would experience as a result of a contract breach.
If monetary damages are not enough to compensate the party that suffered the breach, then they can seek this kind of remedy. It essentially means that the party that breached the contract must fulfill their obligations. Specific performance is used in situations where damages would not be enough to put the wronged party in a position they would have been in had the contractual breach not occurred.
The party that experienced the breach of contract can cancel the contract and sue the breaching party for restitution. That puts them back in the position they were in before the contract was breached. When the contract is canceled, that means the party that experienced the breach no longer has to fulfill their obligations.
Contracts are one of the most important aspects of any business; from the agreements laid out to the signing of the contract to the contractual obligations of the parties involved. If a breach of contract occurs, then that could have potentially devastating consequences for the party that suffered the breach. That is why contractual breaches need to be addressed as quickly as possible.
That is also why the right attorneys should be hired to resolve any contractual breaches. At Hogan Hulet, we have over a decade of experience helping businesses resolve all manner of disputes including breach of contracts. We can help any business owner find the right solution to their problems, so contact Hogan Hulet if you have a contractual dispute that needs to be solved.