Business Litigation Attorneys Handle A Variety Of Breach Of Contract Claims
Business litigation attorneys in Los Angeles are called to deal with a variety of breach of contract disputes. While some of these contract lawsuits involve specialized areas of law, all breach of contract lawsuits have certain basics in common. Some business lawyers will deal with only certain types of contracts because the law in that area may be very specialized. For example breach of an employment contract is better handled by a litigation attorney who specializes in employment matters because there are, especially in California, so many specialized employment laws that affect those contracts.
Business lawyers may need specialized knowledge in the area in which they practice. Although it may not be required breach of real estate contracts should be handled by experienced real estate litigation attorneys who have handled breach of contract lawsuits relating to real property. There are a variety of special laws that apply to real estate contracts and real estate in general that other attorneys may not be knowledgeable about. Real estate lawsuits may involve issues such as specific performance, a lis pendens (Notice of Pending Action), rescission, quiet title and other real estate concepts that are specific to real estate law.
Below are some of the basics of contract law as set forth in California’s Civil Code. Most business litigation attorneys who handle breach of contract lawsuits will have dealt with these issues at some point or another. This is obviously just a quick introduction to contract law and most lawsuits will require the attention of an experienced trial attorney.
Is There A Contract?
The first question a breach of contract lawyer will have to determine is whether there is a contract at all. In the case of a written agreement, this may be an easy question to answer. In other situations the facts may not be as clear cut.
Much of the basics of California contract law can be found in California’s Civil Code. A contract is defined as an agreement to do or not to do a certain thing. The Code states that it is essential to the existence of a contract that there should be: (1) parties capable of contracting (which involves issues of competency and minority); (2) their consent (did the parties actually agree?); (3) a lawful object (criminal activities may not be enforced); (4) a sufficient cause or consideration (did both parties essentially commit something to the arrangement).
Who May Contract?
According to the Civil Code, all persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights. There are specific laws that deal with these exceptions but in most contracts this is not an issue. Needless to say an enforceable contract must identify who the parties are who are bound by the contract. An experienced breach of contract lawyer may also be able to identify whether there is a third party beneficiary who may be able to enforce the contract.
What Is Consent?
When parties consent to a contract, that consent must be (1) free, (2) mutual, and (3) communicated by each other.
When Is Consent Free?
Consent is not free when it is obtained through duress, menace, fraud, undue influence or mistake.
What is Duress?
Duress occurs when a person or their family is unlawfully confined or when their property is unlawfully detained. Many clients will claim that they signed a contract under duress or that they were “forced” to sign a contract but rarely will their fact situation reach the level needed to establish duress. Oftentimes it is simply because a family member asked them to sign and they felt that they had to or were supposed to.
What is Menace?
Menace in a threat could be of such duress as described above, threat of violent injury or property, or actual injury to the character of the person. Menace is very unusual in a traditional business relationship and this is not an often used defense to a breach of contract claim.
What is fraud?
Lastly, fraud is when a party acts with the intent to deceive another or to induce him to enter into a contract by (1) a suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) a positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true, (3) the suppression of that which is true, by one having knowledge or belief of the fact; (4) a promise made without any intention of performing it; and (5) any other act fitted to deceive.
This language is the language of the Civil Code. It is legalistic in nature and not all that easy to understand. An experienced trial lawyer will be better able to determine whether a contract was obtained through fraud but generally fraud involves an attempt to deceive through a blatant lie or through the concealment of some material information. Determining fraud is a question of fact and so an attorney with experience in this area can better evaluate a specific factual situation to determine whether fraud is present.
Business litigation attorneys who handle fraud cases in a business or real estate setting often deal with failure to disclose lawsuits in which material facts are concealed from the other side. Fraud can sometimes be explicit—the forgery of a signature or a fake financial document. In other cases the fraud can be through concealment—the party hid an important fact that was material to the transaction. There are specific legal elements to a fraud claim and a trial attorney can help determine whether something arises to the level of legally cognizable fraud. Needless to say many clients claim fraud in instances where the law would not support a fraud cause of action.
What Is Undue Influence?
Undue influence in the securing of a contract is when someone is has real or apparent authority over another or in whom confidence is reposed takes unfair advantage over the person. This also includes taking unfair advantage of another’s weakness of mind. Lastly it can include taking a grossly oppressive and unfair advantage of another’s necessities or distress.
This is another fact-based inquiry that a breach of contract lawyer is better equipped to evaluate.
When Is Consent Mutual?
Consent is mutual when the parties all agree upon the same thing in the same sense.
When Is Consent Communicated?
Normally consent will not be in dispute because the parties have signed a contract. In those cases where there is some dispute, the court will look to see whether the party has done some act or omission which shows intent to communicate consent. Communication is deemed complete when the party accepting a proposal has put his acceptance in the course of transmission to the proposer.
The most common issue involving the communication of consent is when one party felt that there was a contract but the other party never signed the contract. However, an unsigned contract may not be fatal to a claim for breach of contract. Sometimes parties will start conducting business before a contract is fully signed and sometimes one party will forget to sign the contract. An implied or oral contract may exist if the parties have done everything they were supposed to do under the agreement. In fact the unsigned contract may be excellent evidence of what the parties intended.
When Is A Proposal Accepted?
A proposal may be accepted by performance of the conditions or the acceptance of the consideration offered. Acceptance must be absolute. A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known, or ought to be known, to the person accepting.
Can A Proposal Be Revoked?
A proposal can be revoked at any time before its acceptance is communicated to the proposer, but not afterwards. Revocation can occur by an actual notice of revocation, by lapse of the time prescribed in the proposal for its acceptance or, if not time is prescribed, the lapse of a reasonable time without communication of the acceptance; by failure of the acceptor to fulfill a condition precedent to acceptance; or by the death or legal incapacity to make decisions of the proposer.
What Is The Object Of The Contract?
The object of the contract is the thing which it is agreed, on the part of the part receiving the consideration, to do or not to do. The importance of this element is that the object of a contract must be lawful. Where a contract has a single object and that object is illegal, whether in whole or in part, or wholly impossible of performance, or so vaguely expressed as to be wholly unascertainable, the entire contract is void. A contract may also be partially void when only a portion of the object of the contract is unlawful.
What Is Good Consideration?
Consideration does not sound like a legal word but it has a very specific legal meaning which often only business litigation attorneys who handle breach of contracts understand. Good consideration for a contract is any benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor. Consideration must be lawful or else the contract is void.
What Kinds Of Contracts Are There?
Contracts can be either express or implied. An express contract is one where the terms are stated in words. An express contract may be either written or oral. On the other hand an implied contract is one where the existence and the terms of the contract are manifested by conduct.
Breach of contract attorneys in Los Angeles and throughout Southern California know that this overview of the basics of California contract law only touches the surface of the various issues that must be evaluated in a business contract lawsuit. No one expects a party to know all of this. But it is important to talk to an experienced business litigation attorney who has handled numerous breach of contract lawsuits about your specific situation.
Breach of contract attorney Laine T. Wagenseller is the founder of Wagenseller Law Firm in downtown Los Angeles. Wagenseller Law Firm handles various breach of contract lawsuits, often involving purchase and sale agreements, leases and other business contracts.