What Happens When a California Business Contract is Breached?
Apr 21 2019 0

What Happens When a California Business Contract is Breached?

When two people enter into a contract, each individual is expected to uphold their end of their duties as stated in the agreement. If one person neglects to do so, however, the other person might have a valid case for pursuing legal action.

During business transactions and other kinds of deals, it’s normal for two or more people to enter into a contract for the purposes of making sure the other person upholds their part of the agreement. When either one of these people neglects to fulfill the stipulations of the agreement, they are now considered to be in breach of contract and could face legal repercussions if the issue is unable to be resolved outside of court

What Counts as a Breach of Contract?

The person who is not in violation of the business contract has to be able to establish that the violation really took place. According to California law, if you wish to legitimately go ahead with a case for a breach of contract, the person who is claiming that the agreement has been violated is required to provide proof that:

  • A contract was in place;
  • The opposing person committed a violation of that same contract;
  • The breach committed by the other person had an adverse effect; and
  • Damages were suffered by the plaintiff as a result of that violation.

Types of Contract Breaches

In the State of California, there are two different degrees of contract breach. These are a total breach of contract or partial breach of contract. For a total breach of contract, one of the people involved doesn’t satisfy any of their responsibilities outlined in the agreement, and in a What Happens When a California Business Contract is Breached?partial breach, they satisfy only some of those responsibilities.

The law in California also decides if a breach is material or immaterial. A material breach of contract has an adverse impact on the plaintiff, no matter if the terms of the contract were fully or partially disregarded. An immaterial breach of contract takes place when the other person fulfills their responsibilities but not precisely as described in the contract. It doesn’t have as negative of an influence on the first person.

A partial breach of contract is usually very similar to an immaterial breach of contract, but the 1967 case of Sackett v. Spindler laid out these circumstances that are used to decide if a partial breach of contract might also be a material one:

  • Did the person who was not in violation of the contract still get the expected benefit?
  • How much would it cost for the non-violating party to be compensated for the damages that were caused?
  • Did the violating party make an effort to fulfill their duties, or did they intend to do so?
  • How much grief did the non-violating party endure as a result?
  • Was the violation a deliberate, neglectful, or benign omission of the violating person?
  • How confident is the non-violating person that the violating person is still not going to fulfill their responsibilities?

Each of these things will be taken into account by a California judge. An attorney who is knowledgeable in matters of business law can help the non-violating party decide whether or not their issue will count as a breach of contract in the California court system. If you suspect that you might be involved in a potential breach of contract, please get in touch with the Leiva Law Firm by calling 818-519-4465. We have an extensive background in helping businesses resolve violations of their contracts both in and out of the California court system. We can help you examine your legal rights in Spanish or in English.

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