Understanding the Four Elements of Breach of Contract
Suppose you hired a remodeling company to install new hardwood flooring in your home. After the workers leave, you discover they installed cheaper laminate flooring instead. This is a relatively simple example of a breach of contract.
If you’ve suffered direct losses from a material breach of contract, you may wonder whether you can sue for compensation. While this is possible, to succeed, your breach of contract claim must include four key elements. Below, learn about the four breach of contract elements, then call a Phoenix breach of contract attorney for assistance.
What Are the Four Breach of Contract Elements?
When a breach of contract occurs between two or more parties, the harmed party naturally wants compensation to return them to the same economic position they were in before the breach happened. Unfortunately, it’s not as simple as heading to court and saying that the other party broke your agreement.
For any contract action to succeed, it must include the following:
1. Proof That a Valid Contract Exists
Before you can launch a breach of contract case, you must be able to prove the existence of a valid contract. Contract terms can be either oral or written. However, some kinds of agreements, such as those involving services that can’t be performed in a year or less, require a written contract.
For a court to consider a written or an oral contract valid, it needs to include these key elements:
- Offer: One party makes a clear offer to another party or parties.
- Acceptance: The non-offering party agrees to the specific performance laid out in the contract in good faith without any changes.
- Consideration: Both parties must offer something that is economically beneficial to the other, such as money, goods, or services. For example, you might offer money for a repairman to fix your water heater.
If your agreement is missing any of these elements that a valid contract requires, it’s not legally binding, so you do not have a breach of contract claim.
2. Proof That the Plaintiff Performed Their Contractual Obligations
Next, the plaintiff must be able to prove that they met their obligations as per the contract or, due to uncontrollable circumstances, have a valid excuse for not meeting them. Essentially, if you cannot prove that you met your obligations, you can’t say that the defendant failed to meet theirs.
In certain circumstances, the court may release the non-breaching party from the requirement to meet their contract obligations. For example, suppose a homeowner hired you to install a new gas oven, but you couldn’t do the job until another company installed a gas line for the property. The company that was supposed to install the gas line never arrived, preventing you from installing the oven. The court would likely say that it was impossible to fulfill your previously agreed-upon obligations.
3. Proof That the Other Party Failed To Perform Its Contractual Obligations
If you, the injured party, can prove that you met your obligations, you’ll next have to prove that the breaching party failed to meet theirs. The court will accept several types of contract breaches, including:
- Material breach: Also called failure to perform or an actual breach, a material breach is when the breaching party has failed to meet their duties.