Contract Disputes

Whether in your personal or business life, you enter into contracts on a regular basis. Most of the time, the parties to a contract fulfill their obligations under the contract without incident; however, when a dispute does arise you need an experienced attorney at your side. The attorneys at Kirkland, McGhee & Gann have experience in contract disputes.

Contract Basics

A contract is a legally binding agreement between two or more parties to do something or to refrain from doing something. Most people enter into simple contracts on a daily basis without giving them much thought. Purchasing car insurance, signing a child up for dance lessons, or even agreeing to pay to have the newspaper delivered are all examples of simple contracts you might enter into without realizing it. Any contract requires three elements:

  • Offer – one party makes a promise to do something, or refrain from doing something.
  • Acceptance – another party accepts the terms of the offer exactly as they were offered.
  • Consideration – something of value must be promised in exchange for the promise to do something or refrain from doing something.

For example, when you purchase car insurance, for instance, the insurance company offers to reimburse you in the event of a loss. You accept that offer by verbally agreeing or signing a contract. You give consideration in the form of monetary premium payments and the insurance company gives you a promise to cover any future losses you may have as a result of a collision, theft, or other damage to the vehicle.

Common Reasons for a Contract Dispute

A contract can be as simple as the insurance coverage example or as complex as NAFTA. The more complex the contract, the more opportunities there are for a dispute to arise. A contract dispute can arise prior to the formation of the contract if the parties are unable to agree on the terms of the contract. There can also be a dispute as to whether or not a contract was actually formed by the parties if it is unclear that all three elements exist. The most common cause of a contract dispute, however, is when one party to the contract alleges a breach by another party. There are four major types of breach of contract, including:

  • Minor breach – when a party fails to perform some of the party’s obligations under the contract.
  • Material breach – a breach that is so serious it effectively makes the contract null and void. Consequently, the other party is no longer legally bound by the terms of the contract.
  • Fundamental breach – when a party refuses to perform all, or a significant portion of, the terms of a contract.
  • Anticipatory breach – when a party indicates ahead of time its intention not to perform its obligations under a contract. In this case, the injured party does not have to wait until the party actually breaches but may take legal action immediately.

What Damages Are Available in a Contract Dispute?

The harm to an injured party in a contract dispute can be anywhere from relatively minor to catastrophic. When a contract dispute occurs because of a breach of contract, the injured party must typically pursue monetary damages from the breaching party. The type of damages available will depend on the terms of contract and the type of breach.

The most common type of damages awarded in a contract dispute are compensatory damages. Compensatory damages are intended to compensate the injured party for the harm done by the breaching party.

Consequential damages may also be awarded in a contract dispute. This type of damage award compensates the injured party for indirect expenses incurred because of the breach. For example, imagine that you contracted with a roofing company to replace your roof and they failed to complete the job in the time allotted for in the contract, causing you to have to spend the night in a hotel. You might be entitled to consequential damages for the money you had to spend on a hotel because that expense was an indirect result of the breach of contract.

Some contracts specify the amount of damages a party is entitled to in the event of a breach. Referred to as “liquidated damages,” this type of damages is most often found in contracts where it would be difficult to determine the value of actual damages.

What Should You Do If You Have a Contract Dispute?

If you believe that another party has breached a contract in which you are a party, it is in your best interest to consult with an experienced contract dispute attorney right away. Sometimes, an injured party is legally required to mitigate damages when a contract has been breached by the other party. In essence, this means you must take all reasonable steps to prevent additional damages once you realize there has been a breach. Because it may be difficult to know when this requirement exists, or what to do if it does, you need to consult with an attorney right away to ensure that you protect your rights under the contract.

Why Should You Contact Kirkland, McGhee & Gann?

If you are a party to a contract that you believe has been breached, or you have been accused of breaching a contract, you need an experienced and knowledgeable contract dispute attorney on your side to help you successfully litigate the dispute. Our attorneys at Kirkland, McGhee & Gann are available to help people and businesses resolve their contracts disputes. To discuss your legal options, contact the team at Kirkland, McGhee & Gann by calling 850-332-6120 or by clicking below to schedule an appointment.