In a perfect world, parties to a contract would sign a written agreement, shake hands, fulfill their respective obligations, and everyone would live happily ever after. Unfortunately, this is not a perfect world, and it is not an uncommon event when parties act in ways that deviate from the terms of the contract or they fail to perform altogether.
Before becoming engulfed in negative emotion and anxiety after the party to your contractual agreement breaches, consult with a breach of contract attorney right away. An experienced Baltimore contract litigation attorney can help you understand what legal remedies are available to you. The Maryland breach of contract attorneys at the Heyman Law Firm can help you resolve your dispute and will put you in an optimal position to receive just compensation for the harm you endured.
What are the Elements of a Contract and How Can They be Breached?
Whether its terms are for the merger of a multi-million-dollar business or for the sale of a candy bar, there are four elements that are essential to every contract. Every contract must contain these elements in order to be considered legally bound to the agreement:
- Offer
- Acceptance
- Consideration
- Mutual assent
An offer is a promise by one party to act or refrain from acting. Offers are binding upon acceptance. Acceptance is when the non-promising party unequivocally agrees to the terms of an offer. When the non-promising party accepts the offer, a contract is formed. Consideration is the benefit each party receives by entering into a contractual agreement. In order for a contract to be legally binding, mutual assent must have existed, i.e. the parties intended to enter into a contract.
There are numerous ways in which a contract can be breached based on what the specific terms of the agreement are. However, generally speaking, there are three categories of behavior that may constitute a breach:
- A party fails to perform as promised
- A party makes it impossible for another party to perform
- A party declares that he or she has an intent not to perform (repudiation of the contract)
What Damages Can I Recover When a Contract Has Been Breached?
The resolution of breach of contract disputes is not as cut and dry as some might think. There are often questions about intent and performance that are not easily resolved. This often happens when parties enter into a contract based on “trust” and therefore leave out some important terms.
There are several types of damages that are available to the non-breaching party of a contract. Compensatory damages are awarded for the purpose of making a plaintiff “whole.” Two types of compensatory damages that a plaintiff can recover are:
- General damages – A plaintiff who is awarded general damages recovers for losses directly incurred by the breach
- Special damages (consequential damages) – A plaintiff who is awarded special damages recovers for losses incurred that are not predictable or are incurred because of special circumstances
In some cases, courts will award punitive damages in a breach of contract cause of action. The purpose of punitive damages is to make an example out of the defendant so as to deter people from committing similar acts in the future. The goal behind punitive damages is to punish the defendant for particularly egregious or outrageous behavior.
Sometimes a contract will contain a liquidated damages clause that stipulates a predetermined sum of money to be distributed in the event that the contract is breached in some way. A court will enforce a liquidated damages clause only if the following conditions are met:
- The amount of damages or the injury is uncertain;
- The amount of damages in the clause is reasonable and is considered to be anticipated harm;
- It is difficult to ascertain the amount of damages;
- There are no other legal remedies to cover the damages; and
- The purpose behind issuance of the damages is for protection rather than to serve as a penalty.
What Other Legal Remedies Are Available to Me When a Contract Has Been Breached?
Besides an award of damages, courts may offer one or more of the following remedies to a non-breaching party in a breach of contract cause of action:
- Rescission of the contract
- Quantum meruit
- Injunction
- Specific performance
Baltimore Breach of Contract Attorney
If you are involved in a breach of contract dispute, it is imperative that you consult with a skilled contract attorney who can give you guidance on what your options are going forward. When a party to an agreement breaches in any way, the consequences can be not only devastating financial losses but also losses of time, resources, and opportunities to pursue other business ventures.
In a breach of contract dispute, compensating the non-breaching party is not the only incentive behind pursuing a cause of action. In order to create a culture of fair and ethical business practices throughout your community and beyond, it is imperative that a party who wrongfully breached a contract is held responsible for his or her actions. Call the Heyman Law Firm today at (410) 305-9287 for a confidential consultation with an experienced breach of contract attorney.
