3 Ways to Prove Breach of Contract in Baltimore

When a party to a contract has deviated from its terms, a lot can go wrong. Any time money is involved, the stakes are usually high, and breaching the terms of a business agreement can lead to grave financial loss. Through written terms and proof of performance, non-breaching parties have the opportunity to provide courts with adequate proof that the partner to their contract was in breach. The Baltimore business and litigation attorneys at the Heyman Law Firm discuss three ways to prove that a non-breaching party can prove breach of contract…

What are the Elements of a Contract?

In an action for breach of contract, breaching parties will sometimes justify their deviation from the terms of the agreement by stating that a contract never existed. Therefore, it is important to understand the essential elements of a contract and how they come together to form an enforceable agreement that both parties are bound to. There are four essential elements that must exist in order for a contract to be formed. These elements are:

• Offer
• Acceptance
• Consideration
• Mutual assent

An offer is a promise to act or refrain from acting. It is not binding until the promisee accepts its terms. Acceptance occurs when the promisee unequivocally agrees to the terms of the offer. Once the promisee has accepted the offer, a contract has been formed. In order for a contract to be binding it must have consideration. Consideration is the value or benefit both parties receive by entering into the contract. A contract cannot be considered valid until there is a “meeting of the minds,” i.e. mutual assent. Both parties must have had the requisite intent to enter into a contract at the time of formation.

There are instances when the terms of a contract were never enforceable. This is called a void contract. Some examples of when a contract is considered void include:

• Illegal terms or against public policy
• Unconscionable terms
• Restricting legal rights (example: right to work in some states)

Voidable contracts exist where one of the parties has the option of cancelling or revoking the agreement. Some examples of voidable contracts are:

• Mutual mistake of fact
• Infancy
• Duress

Elements of Breach of Contract

There are four essential elements that much be established in order to prove that a breach has taken place. This must be shown regardless of what kind of breach occurred. These elements are:

• A valid contract existed
• A party deviated from material terms of the contract
• The non-breaching party incurred losses as a result of the other party’s breach

Ways to Prove Breach of Contract

To prove that a valid contract exists, there must be an offer, acceptance, consideration, and mutual assent. The non-breaching party must also show that the contract was not void or voidable. If a court finds that terms of the contract are illegal or substantially one-sided, it may hold that the contract is void. Similarly, if the non-breaching party can prove mutual mistake of fact or that the contract was signed under duress, a court will give that party the option to cancel the contract.

In order to show that the term that a party breached was material, the non-breaching party deviated from the foundation of the contract itself. It deprives the non-breaching party of the benefit that would have been received if the terms of the contract had been fulfilled. An example of a material breach would be if a buyer entered into a contract to purchase a farm and the seller sold the farm to someone else. Courts will consider several factors in determining if a breach is “material.” Some of these factors include:

• The extent to which the non-breaching party will be deprived of a benefit that was reasonably expected
• Amount of benefit the non-breaching party received
• Willful or negligent behavior performed by the breaching party
• Likelihood that the party in breach will perform the rest of the contract terms
• Extent of contract that has already been performed
• Hardship to the party in breach
• Unjust enrichment or other inequity
• Extent of damages

In order to show that the non-breaching party has incurred a loss, it must be shown that the breach was the causation for loss. The test for causation is the “but for” test, similar to negligence. Thus, the non-breaching party must show that “but for” the breaching party’s deviation from the terms of the contract, the non-breaching party would not have suffered a loss. For example, but for the breaching party selling the farm to someone else, the buyer would not have lost the benefit of the bargain. The second element that must be shown is that the breach was the proximate cause of the loss. This means that the loss arose naturally out of the circumstances of the breach.

Baltimore Breach of Contract Attorney

If you have incurred losses as a result of a breach of contract action, you may be entitled to damages. Contact a Baltimore breach of contract attorney at the Heyman Law Firm to find out what kind of compensation you may be able to receive for the harm you have suffered. Call (410) 305-9287 today and schedule a confidential consultation.