If a breach of contract claim has been asserted against you or your company, or you are the one asserting a breach of contract claim against another, it is advisable to immediately contact a business litigation attorney to allow him or her sufficient time to review the claim and to take adequate action.. Similarly, if you receive a demand letter you should try to address the contention with the help of a business attorney as soon as possible to prevent a lawsuit. Before resorting to litigation, the attorney's first priority should be to try to exhaust all methods of resolution to avoid potentially expensive litigation costs to their client. Your legal counsel may also contact the applicable individual or organization with whom the contract dispute arose, if there is a likelihood of prompt and acceptable resolution of the dispute in your interest. It should be noted that while there are exceptions to this general rule, if the matter involves private litigants, a defendant is given twenty (20) days to respond to a lawsuit after having been served with process. When the aggrieved party is considering filing a lawsuit it must be mindful that its claim(s) will be subject to one or more deadlines and statutes of limitations. This simply means that a litigant has a limited period of time to assert a claim before it is forever barred regardless of its merits. In addition, there may be other notice provisions that could apply and must be met in order to preserve a litigant's right to file suit. For this reason, regardless of which side you are on, it is important to contact a litigation attorney right away to prevent adverse future consequences, such as the dismissal of your claim, or the entry of a default judgment if you are the defendant.
As mentioned above, before filing or responding to a lawsuit involving breach of contract, the merits of your position should be carefully ascertained. Your Central Florida Breach of Contract attorney in Orlando will first analyze the contract with all necessary and applicable documents and inform you of your legal rights, standing and your options for resolving the dispute. The following considerations below provide a brief and concise overview of some of the key elements required to ascertain your position. While there exist a great deal of additional matters which must be considered with your individual circumstances, this overview is intended to provide the reader with basic understanding of some factors that such claims may entail. It is not a conclusive list upon which the reader should rely upon. In addition, some of these steps may contain matters better suited within prior or subsequent steps, and are separated merely for ease of understanding and at the expense of accuracy.
The first step in figuring out a contract dispute is determining whether a valid agreement in fact exists. Among other factors this requires analysis of whether:
If consideration is absent a party should consider detrimental, reasonable and foreseeable reliance as a substitute to consideration, if such reliance has induced upon the party action or forbearance of a substantial and definite character (promissory estoppel). If a valid contract does exist, the second step requires analysis to determine whether certain defenses preclude its validity or enforcement. Whether you are bringing a lawsuit or defending against it you should carefully consider the application of these defenses, which include among others: lack of capacity, duress, innocent or fraudulent misrepresentation, ambiguity or misunderstanding, unilateral mistake, mutual mistake involving a material fact, illegality, divisible contract, matters involving public policy (such as covenants not to compete or unconscionable agreements), statute of limitations (see above) and statute of frauds (requires certain contracts be in writing unless falling within an exception).
Once it has been determined that a valid and enforceable contract exists, the next step is to ascertain whether the obligated party has a present duty to perform. Present duty to perform is at issue when there is a defense to performance or when a condition exists that has not been satisfied or excused. A condition is an event the occurrence or nonoccurrence of which limits, gives rise or extinguishes one's duty to perform under the contract. If no condition is present, or your contract is unconditional, then absent a defense to performance, you and/or the other party may have a present duty to perform. There are generally three types of recognized conditions (which can be express, implied or constructive). A condition precedent requires the occurrence or happening of an agreed event before there is a deal giving rise to an absolute duty to perform by the other party. A condition concurrent is one that runs alongside the other party's obligation. A condition subsequent occurs after the formation of a contract when the happening of an event discharges another party's performance obligation. The occurrence of a condition may be excused in a number of ways, such as by a protected party's action or inaction. For example, a party who is protected by the condition may choose to voluntarily relinquish protection of the condition either expressly or impliedly by failing to enforce it in prior dealings or by failing to cooperate. A condition may also be excused by a party's perspective inability or unwillingness to perform (anticipatory repudiation) or, absent assumption of risk, by substantial performance.
In addition to the above considerations, contracts are often complicated by the added involvement or benefits assigned to or made applicable to third parties. For instance, such is the case when two people enter into a contract intending to benefit a third party. In such a situation, there is the promisor, who is the party promising to perform; promisee, who is the party to whom promisor owes performance for the benefit of beneficiary; and the third-party beneficiary (TPB), who is the person benefiting under the contract. If it is the intent of the parties that another person receive the benefit of promisor's performance, the third party beneficiary (TPB) is considered an intended beneficiary with enforceable rights under the contract. If performance will satisfy a debt the promisee owes, the third party is often called a creditor beneficiary. It should be noted that if the beneficiary is intended, the promisor's and promisee's right to rescind or modify the contract can be restricted in favor of TPB if certain circumstances are present. Where a creditor beneficiary is involved, he or she may sue a breaching promisor and/or promisee but may obtain only one satisfaction. A promisee may also sue the promisor once the promisee pays the creditor beneficiary on the existing debt. If the debt has not yet been paid by the promisee, the promisee may still be able to compel the promisor to pay in a specific performance action.
A more specific situation comes into play when considering delegation of duties or assignment of rights. For instance, a party required to perform (delegator) may transfer his or her contractual duty to another person known as delegatee, to perform for the initial party owed, called the obligee. While a party may delegate many contractual duties to another there are various exceptions and absent novation, - where obligee expressly consents to the transfer, - the delegator may still remain liable on the contract to obligee, even if the delegatee expressly assumes delegator's duties. If the delegator acting as a surety is sued by the obligee on the contract, delegator could seek reimbursement from the delegatee (principal), based on an assumption agreement, but the obligee cannot compel the delegatee to perform, unless there is an assumption agreement giving rise to a third party beneficiary situation. Similarly, an assignment of rights takes place when two parties enter into a contract and subsequently one party, known as the assignor, transfers his or her rights under the contract to a third party called the assignee. The party who owes the duty to perform is called the obligor and unlike in a third-party beneficiary situation, all three parties are not present from the outset. As a general rule, contract rights are assignable unless they would substantially change or alter the obligor's risks or duties. Additionally, absent certain exceptions, such assignments are freely revocable unless supported by consideration, obligor has already performed, or there exists a detrimental reliance. It should be noted that the assignor is deemed to give several implied warranties to the assignee, the breach of which could give rise to a lawsuit. If assignee sues the obligor, but finds him or herself subject to the same defenses obligor has against the assignor, the assignee may also have a cause of action against the assignor if the assignee was without notice of the defense at the time of the assignment. (However, assignor may not be liable to the assignee if the obligor is insolvent or incapable of performing. For example, payment by the obligor to the assignor could be an effective defense against the assignee, unless the obligor is aware of the assignment. For example, if person A paid person B, person A is not also liable to C, unless person A knew of the assignment from B to C. Consult with a business attorney in your applicable jurisdiction to determine applicability and adoption of these rules in your jurisdiction and their relevance to your specific fact situation.
Finally, something should be said about the Parol Evidence Rule. Aside certain exceptions, this rule keeps out prior and contemporaneous oral or written extrinsic evidence used to interpret a written agreement, if it contradicts, modifies or varies an agreement determined to be the complete and exclusive statement of the parties. However, where prior or contemporaneous extrinsic evidence that contradicts an agreement is generally not admissible, numerous exceptions exist when a writing merely modifies or varies an agreement in question. Specifically, if evidence is presented purporting to modify, vary or add to an agreement, a number of important considerations arise, including the determination of whether the writing was intended to be the final, complete, exclusive and entire expression of the parties. If the writing was intended to be the final and exclusive understanding of the parties, it may neither be contradicted nor supplemented. On the other hand, if the writing is intended as the final but not the exclusive or complete understanding of the parties, it must not be contradicted, but may be supplemented with consistent additional terms. If the agreement is not intended as the final expression, the parol evidence rule will not bar introduction of further evidence. Additional exceptions exist based on admissibility of evidence to correct a clerical error, to establish a defense against formation of a contract (such as fraud, duress, mistake, illegality, lack of consideration), to show existence of a condition precedent to demonstrate the contract was not effective prior to occurrence of the condition, existence of a prior valid agreement constituting the applicable agreement between the parties, the need to interpret vague or ambiguous terms in the written agreement and a few others. Finally, it should be noted that the presence of a merger clause in an agreement (reciting that the agreement is complete on its face) may strengthen the presumption that the written document is the complete and entire understanding of the parties.
Once it has been determined that a valid and enforceable contract exists, and there is present duty to perform, a breach of contract claim may be meritorious and the remedies of the non-breaching party should be carefully considered. In this context, it may be important for the pursuing party to be able to show that she or he would have been willing and able to perform but for the breaching party's failure to meet his or her end of the bargain.
If your company has sensitive business issues in Orlando or anywhere in Central Florida, and needs guidance to file or defend a lawsuit, we highly recommend that you obtain experienced legal counsel to ensure that your interests are properly protected. Our Central Florida breach of contract attorney can be reached by calling (407) 205-2330. You may also fill out the online form and our Orlando business lawyer will contact you shortly. We have helped many businesses in the past navigate through this maze and would be honored to help you too! We value your privacy and will keep any information you provide strictly confidential.
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