A breach of contract can present a serious issue for your business.

Breach of Contract

If you have experienced a breach relating to an obligation under the law to pay a sum of money that is critical to the success of your business, you will need legal advice from a seasoned and experienced lawyer. The same is true if you are facing a lawsuit for breach of contract. The attorney you select should be an experienced litigation attorney, because your dispute about breach may well be resolved in through litigation in civil district court (or superior court) under contract law. We are highly experienced in this area of the law and have had significant successes in breach of contract cases, as well as related claims arising under tort law. Call us today; we would be happy to discuss your matter with you.

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Is the Breach of Contract a Material Breach?

A breach of contract is only actionable under the law if it is a material breach. Washington law instructs that”

“A material breach is one that “substantially defeats the purpose of the contract.” Materiality is a term of art in contract analysis and identifies a breach so significant it excuses the other party’s performance and justifies rescission of the contract itself. If the breach is material, the aggrieved party may cancel the contract. The aggrieved party may sue also for damages if the party can show that he would have been ready, willing, and able to perform but for the breach.

§ 10:1.Overview—Material breach, 25 Wash. Prac., Contract Law And Practice § 10:1 (3d ed.)(internal citations omitted).

Under Oregon law, the distinction between an immaterial breach and a material breach is that a material breach is “so substantial and important as in truth and in fairness to defeat the essential purpose of the parties.” Weaver v. Williams, 211 Or 668, 676–677, 317 P2d 1108 (1957)

As stated in the Restatement (2nd) of Contracts, the following factors are relevant to a court’s determination of whether a material breach exists:

  1. The extent to which the injured party will be deprived of the benefit which he reasonably expected;
  2. The extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
  3. The extent to which the party failing to perform or to offer to perform will suffer forfeiture;
  4. The likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; and
  5. The extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

Cited in. DC Farms, LLC v. Conagra Foods Lamb Weston, Inc., 179 Wash. App. 205, 317 P.3d 543 (Div. 3 2014)

Even in the event that there has been a material breach of a binding agreement, there may still be defenses against enforcement (including waiver, estoppel, impossibility, impracticability, and mistake).

Is There a Binding Contract?

Before determining whether you have (or are facing) a viable claim for breach of contract, your litigation attorney must first enquire whether there is a binding contract under applicable contract law.

The essential elements for the formation of a contract vary by jurisdiction. Under Washington law, “[i]n order for a court to find a valid, binding, and completed contract between the parties, there must be:

  1. competent parties;
  2. a legal subject matter;
  3. mutual assent;
  4. a proper and unrevoked offer;
  5. an acceptance of such offer; and
  6. valuable consideration.”

§ 2:2.Elements of contract—Overview, 25 Wash. Prac., Contract Law And Practice § 2:2 (3d ed.). “Basically, a contract is created if there is an agreement made between competent parties who express definite assent, and there is sufficient consideration in the form required by law.” Id.

Under Oregon law, “an offer containing a promise for a consideration to do an act, which a person has a lawful right to do, made by one person to another followed by an unqualified and unequivocal acceptance by the person to whom it is made of the offer as made […] creates a contract between the person making the offer and the person accepting it.” Shaw Wholesale Co. v. Hackbarth, 102 Or 80, 94, 201 P 1066 (1921).

Even where all of the elements of contract exist on paper, there may be defects in formation that render an agreement invalid and keep the agreement from being a binding contract matter of law. For example, certain contracts must be reduced to writing under the statute of frauds, and those that are not are invalid and not enforceable. Contract law will also not apply to enforce illegal subject matter, such as an agreement made in violation of public policy or in defiance of applicable rules of professional conduct.

In the event there is not a binding contract at issue as matter of law, that is not the end of the inquiry. Even where valid theories of obligation or potential claims do not arise out of contract law, enforceable claims may exist under parallel or complimentary theories of tort law. Accordingly, tort liability may arise even where a breach of contract is not present. An experienced lawyer will appreciate how and when all such obligations at law may arise, and a skilled litigation attorney will understand how and when to best present all related claims and/or defenses.

OUR ATTORNEY:

Eric Helmy

Business Litigation Attorney

SPEAK WITH A SKILLED ATTORNEY:

The legal advice of a skilled lawyer is necessary to determine whether a binding contract is likely to exist. The determination of materiality requires a highly practiced eye and mind – that of an attorney who has long experience in the field. You should not attempt to determine whether there has been a material breach of any such contract – or what your rights or obligations may be – without the help of an experienced litigation attorney. Call us today; we’ll be happy to discuss your situation with you.