How are Contracts Typically Breached?
There are a few ways that a contract can be breached, but the most common is when one party fails to fulfill their end of the bargain. This could mean that they don’t provide the goods or services that they agreed to, they don’t do so promptly, or they don’t meet the quality standards laid out in the contract. In some cases, a breach of contract can also occur if one party tries to back out of the deal entirely.
Contracts are made to protect both parties involved, so it’s important to know what your options are if you find yourself in a situation where someone has breached their contract with you. If you are dealing with a breach of contract in Arizona, contact Resolvere Law PLLC at (480) 568-1327 to learn how we can help you.
What Are the Three Types of Breach of Contract?
In Arizona, there are three main types of breach of contract.
Those breaches include:
- Material breaches, meaning one party does not fulfill their obligations in the contract.
- Partial breaches, meaning one party does not fulfill part of their obligations in the contract but still fulfills part of it.
- Anticipatory breaches, meaning one party foresees the other party’s inability to fulfill their obligations in the contract.
Each type of breach requires its own analysis. A material breach can relieve the non-breaching party from its duty to perform; a material breach can occur when a party fails to perform a substantial part of the contract or one or more of its essential terms, or when it fails to perform something so important that the very purpose of the contract is defeated. In analyzing such a case, a court may consider to what extent a party is deprived of a benefit that is reasonably expected. Whereas the line between a material and partial breach can require a different analysis, which also may require a victim of a partial breach to continue its own performance. For an anticipatory breach, a court may consider whether there is a positive and unequivocal manifestation on the part of the party allegedly repudiating that they will not render the promised performance when the time fixed for it in the contract arrives. There are a number of additional legal principles to consider depending on the nature of the claim.
Legally, a breach of contract in Arizona can refer to any of these three breaches. However, any breach of contract allows you to sue for damages.
What Are Some Common Consequences of Breach of Contract?
The consequences of breaching a contract can vary depending on the severity of the breach and how much it impacts the other party. The non-breaching party may be able to sue for damages, which could include the cost of any lost profits or the value of the goods or services that were not provided. Sometimes, the court may also order the breaching party to perform their obligations under the contract specifically.
For instance, if you hired a contractor to build brand new oak cabinets in your kitchen, but they actually made the cabinets out of pine, that would constitute a breach of contract. In this scenario, you could approach the contractor with this breach and demand that they rebuild the cabinets with the correct materials. If the contractor doesn’t want to eat the costs and rebuild the cabinets, they could refuse. In this case, you could send them a demand letter for the cost of repairing the cabinets with the correct material. If they do not pay, then you could file a lawsuit against the contractor. The court may order the contractor to pay you the costs you incurred, or they could order the contractor to repair the cabinets themselves.
The aggrieved party can also sue for damages like monetary losses, property damage, reputation tarnishment, and more. If you are unsure what to include in a lawsuit, reach out to our team today. We will review your case and let you know what your options are moving forward.
What are the Potential Solutions?
The first step in addressing a breach of contract is to try and reach a resolution with the other party. This can often be done through negotiation, mediation, or arbitration. If those methods are unsuccessful or not possible, then the next step would be to file a lawsuit.
A lawsuit for breach of contract can be filed in either state or federal court, and the choice of which court to file in often depends on the value of the contract and where the parties live. If the contract was made between two businesses, then it may need to be filed in a special commercial court.
Once a lawsuit is filed, each party will have an opportunity to present their side of the story to a judge or jury. While legal representation is not required, it is recommended so that the judge or jury gets an accurate representation of the facts at hand. If the breaching party is found to violate the contract, they may be required to pay damages to the other party. These damages can include both economic damages, such as lost profits.
Can I Collect Attorney’s Fees for Breach of Contract?
Under Arizona law, a successful party to a civil action shall recover all costs expended pursuant to A.R.S. Section 12-341. Similarly, under A.R.S. Section 12-341.01, in any contested action arising out of a contract, the court may award the successful party reasonable attorney fees.
The Arizona Rules of Civil Procedure allow for other avenues to resolve a dispute, including Rule 68, Offer of Judgment. If an offer is properly made and rejected, a party could face sanctions when a judgment is entered based on the fact that an offer was rejected. With recent rule changes, today, a party who rejects an offer, but does not obtain a more favorable judgment, must pay as a sanction twenty percent of the difference between the offer and the amount of the final judgment. In addition, under this rule, to determine if a judgment that includes an award of taxable costs and attorney’s fees is more favorable than the offer, the court must consider only those taxable costs and attorney’s fees that were reasonably incurred as of the offer date. In some cases, therefore, a party may decide to serve an offer to enter judgment early on in a case before costs and fees accrue.
If you are suing for breach of contract, it’s in your best interest to hire an experienced attorney who knows how to win your case. With our team on your side, you can rest assured that we will use our experience and knowledge to get you the desired outcome.
What Are the Benefits of Hiring a Lawyer?
Hiring a lawyer is not required, but it may be beneficial if you are dealing with a breach of contract. A lawyer with experience can help you understand your legal options and what they mean for you after taking a look at your contract. If necessary, they will ardently represent you in court and do everything possible to ensure a favorable outcome for your case. If you are considering hiring a lawyer, call Resolvere Law PLLC (480) 568-1327 to get the valuable representation you need and deserve.