When Should a Breach of Contract Lawsuit Be Brought?

Avoid Taking a Breach of Contract Case Lightly. Even the Most Straightforward Appearing Lawsuits May Have Many Twists and Turns That Deserve Careful Review. Obtain Quality Legal Advice and Move Forward With Informed Caution.

Understanding the Common Contract Law Concerns Arising Within Business Relations Including Interpretation Issues

Contract Document When a person or a business negotiates and then comes to agreement and forms a contract with another person or business, it is expected that all involved will honour the agreement.  When there is a failure to honour the agreement, a breach of contract lawsuit may arise; however, a party to a contract may be blinded by a subjective perception or subjective interpretation that a contract was breached; and accordingly, before starting a lawsuit, especially where significant costs penalties may be awarded against you for failing to win lawsuit, you, or any other party to a contract, should carefully assess the likelihood of success before commencing legal action.

What is a Breach of Contract?

When attempting to determine if a contract was legally breached, the first step is to determine whether a binding contract even existed.  Of course, there may be a situation where people negotiated, seemed to agree to various terms, shook hands, signed a document, among other things; however, what legally constitutes as a binding and enforceable contract involves much more than just outward appearances.  To determine whether a legally binding and enforceable contract actually existed and thereafter determine if the contract was improperly breached a thorough review is required.  When conducting the review, carefully consider whether:

  1. The discussions had, and agreements made, meet the legal elements necessary for the formation of a binding contract;
  2. The formation of the contract can be reasonably proven with clear evidence of the express terms as well as any implied terms which constitute the ultimate agreement;
  3. The laws that may limit or restrict application or interpretation of the contract are reviewed including concerns such as;
  • The parol evidence rule and whether what is subjectively perceived as the ultimate agreement will hold up in a court;
  • The possibility of ambiguous terms that may initiate the contra proferentem doctrine;
  • The potential for concerns regarding undisclosed onerous term clauses that may be struck by a court;
  • The statutes that may void or alter or otherwise supercede contract terms; and
  • The many other concerns applicable to contract law disputes.

Once it is well understood that a legally enforceable contract existed, within binding terms, and that evidence and circumstances will show that a party failed to fulfill the terms of the agreement, the next step is to consider:

  1. What parties, meaning who, should the allegations be aimed at;
  2. What factual allegations should be made, meaning what details of the situation are relevant to tell the necessary story;
  3. What legal allegations should be made, meaning that reasons for suing beyond just breach of contract may apply such as negligence, among other legal issues;
  4. What legal remedies should be claimed, meaning what type of compensation and what amount of compensation should be sought;
  5. What is the best timing for commencing the lawsuit;
  6. What further risks should be considered such as, among other things;
  • The risk of a counterclaim (known in Small Claims Court as a Defendant's Claim);
  • The risk of difficulty in obtaining evidence, or witnesses, to prove the allegations; and
  • The risk of failing to succeed in the case and being ordered to pay costs.
What Should a Breach of Contract Victim Do?

As outlined in brief above, a breach of contract case may be much more complicated than first appears.  Prior to starting a lawsuit, it is wise to review the situation carefully and obtain legal advice based on the merits of the case and likelihood of success.  Preparing a strategic gameplan is also imperative as advantages, or disadvantages, may arise as a case moves forward, especially as there are almost always unexpected surprises during the course of litigation.


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