The Main Difference Between Breach of Contract and Bad Faith
Oct 5 2022 0

The Main Difference Between Breach of Contract and Bad Faith

Business owners across the state of California will likely have various agreements or contracts with different vendors and service providers to help them run their operations. As a result, when a contract is in place it is expected that the terms agreed upon be met and delivered. It is also an expectation that all parties included in the contract are going into it with honesty and the intention to honor their obligations.

There are many times when the terms of a contract may not be fulfilled, or when one or more parties engage in fraud or is deceitful with their actions and behaviors. In terms of running a business; when these elements exist, this could greatly impact a business’s success and profitability. Breach of contract issues and bad faith can cause great financial losses, loss of time and productivity, and impair the company’s ability to operate.

Comparing Breach of Contract and Bad Faith

The Main Difference Between Breach of Contract and Bad FaithBreach of contract and bad faith insurance are both situations that share a similar element. That element is losses. In both situations, the victim on the receiving end suffers some type of loss. How that loss takes place, however, can differ.

The main difference between breach of contract and bad faith is intent. When a breach of contract takes place a violation of an agreement occurs. Examples of a breach of contract can include:

  • Starting a job and then not finishing it.
  • Failure to complete a project by an established deadline.
  • Not executing every aspect included in the agreement.

Bad faith insurance, on the other hand, happens when an insurance company or a third party deliberately is deceitful. Some examples of bad faith insurance include:

  • Entering into an agreement knowing that the work or services will not be provided.
  • Lying, being dishonest, or purposely misrepresenting specific facts.
  • Agreeing to do work without the means or ability to actually do it and get it done.

If you are a business owner in California that is dealing with an issue related to breach of contract or insurance bad faith, you may be able to take your grievances to court and hold negligent or dishonest parties accountable. For assistance with legal recourse, the Los Angeles business litigation lawyer at the Leiva Law firm can help.

If payment was made for a service that was never provided or finished, this can be considered a violation or breach of a contract. As a result, the party that paid and did not get what they paid for can hold the other party accountable through legal means.

Insurance providers are required to be honest about their services and if they are not, and provide falsehoods to attract customers to turn a profit, this is bad faith.

Speak with a Los Angeles Business Litigation Attorney Today

Whether you were the victim of a breach of contract or a bad faith insurance situation, the outcome is that you suffered some type of loss. Holding responsible parties answerable for their actions to recoup your losses is your right. To have your specific circumstances examined and to learn more about if you have a case for compensation, please reach out and call the Leiva Law Firm to schedule a free consultation at (818) 519-4465. 


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