Suing for Breach of Contract: Legal Elements, Defenses, and Available Remedies

The legal definition of contract enforcement involves the judicial review of a failed promise. When you initiate a lawsuit, you are alleging that a party failed—without legal excuse—to perform their part of a binding bargain. This failure can involve missing a deadline, providing subpar quality, or a total refusal to perform.

A civil complaint is the formal document that begins the litigation process. It must clearly outline the facts of the case, the specific terms of the contract that were violated, and the damages suffered. Proving a breach requires more than just showing a loss; it requires showing that the loss was a direct result of the other party’s specific failure to act as promised.

• Material Breach: 

This is a substantial failure that goes to the heart of the agreement. If a developer fails to deliver the code for a software project entirely, it is a material breach. You have the right to stop your own performance and sue for breach of contract for the full value of the deal.

• Minor Breach: 

This is a partial failure that does not destroy the value of the deal. If the code is delivered but lacks a minor feature, it may be a minor breach. You can still seek a remedy for the specific missing part, but you are generally required to fulfill your end of the contract.

Before filing a lawsuit, a formal demand letter is a critical procedural tool. It serves as a final notice to the other party, outlining the breach and providing a deadline to fix it. Often, a well drafted demand letter can lead to settlement negotiations, resolving the contract dispute without the time and cost of a full trial.

• Anticipatory Breach: 

When the other party clearly states they will not perform before the deadline arrives, allowing you to sue immediately to mitigate further loss.

• High Value Economic Loss: 

When the breach causes a terminal interruption to your business operations or results in significant lost profits.

• Statute of Limitations Pressure: 

When the legal deadline to sue is approaching, making immediate action necessary to preserve your rights.

• Compensatory Damages: 
• Money meant to cover the actual, direct loss.
• Consequential Damages: 
• Recovery for secondary losses, such as lost profits, that were foreseeable at the time the contract was signed.
• Specific Performance: 
• A court order forcing the defendant to perform their specific duty, used when the subject of the contract is unique, like real estate.

Under U.S. Law, a plaintiff has a duty to take reasonable steps to minimize their losses after a breach. This is known as the mitigation of damages. If you fail to take these steps, the court may reduce your total award by the amount you could have avoided through reasonable effort.

• Impossibility of Performance: 
• The defendant argues that an unforeseen event made it impossible for them to fulfill the contract.
• Prior Breach: 
• The defendant claims they stopped performing because you failed to meet your obligations first.
• Unconscionability: 
• The argument that the contract terms were so one sided and unfair that they are legally unenforceable.

The statute of limitations is the window of time you have to file your case. This varies by state and whether the agreement was written or oral. Written contracts typically have a longer window (often 3 to 6 years), while oral agreements are much shorter. Missing this deadline results in a permanent bar on your ability to recover.