When one party fails to perform their contractual obligations, the other party may have a breach of contract claim. Proving breach requires demonstrating that a valid contract existed, the defendant failed to perform, and damages resulted. Understanding these elements helps you evaluate and pursue breach claims.
Elements of Breach of Contract
To prove breach of contract, you must establish a valid contract existed between the parties, you performed your obligations (or were excused from performance), the other party breached the contract, and you suffered damages as a result.
Failure to prove any element defeats the claim. Each must be established by preponderance of the evidence.
Proving a Valid Contract
Contracts require offer, acceptance, consideration (something of value exchanged), and mutual assent (meeting of the minds). Written contracts are easier to prove but aren't always required—oral contracts are enforceable for many types of agreements.
The Statute of Frauds requires certain contracts to be in writing, including contracts for sale of goods over $500, real estate transactions, and agreements that cannot be performed within one year.
Types of Breach
Material breach goes to the heart of the contract—a failure so significant that it defeats the purpose of the agreement. Material breach excuses the other party from further performance and entitles them to damages.
Minor breach (partial breach) is a less significant failure that doesn't defeat the contract's purpose. The non-breaching party must still perform but can recover damages for the breach.
Anticipatory breach occurs when a party clearly indicates before performance is due that they won't perform. You don't have to wait for actual breach—anticipatory breach triggers immediate remedies.
Your Performance Obligation
Generally, you must show you performed your own obligations before claiming breach. However, if the other party's breach was material, their breach excuses your performance. If they breached first, you're not required to continue performing.
Document your performance carefully—evidence that you fulfilled your obligations strengthens your breach claim.
Damages for Breach
Compensatory damages put you in the position you would have been in had the contract been performed. This includes expectation damages (the benefit of the bargain) and consequential damages (foreseeable losses caused by the breach).
Consequential damages must have been foreseeable at the time of contracting. Unusual or unexpected losses may not be recoverable.
Incidental damages cover costs of dealing with the breach—finding substitute performance, storage costs, etc.
Duty to Mitigate
You have a duty to mitigate damages—take reasonable steps to reduce your losses. You can't sit back and let damages accumulate when you could reasonably minimize them. Failure to mitigate reduces your recovery.
Mitigation doesn't require extraordinary effort or accepting unreasonable alternatives—just reasonable steps.
Liquidated Damages
Some contracts specify liquidated damages—a predetermined amount payable upon breach. These provisions are enforceable if the amount is a reasonable estimate of anticipated damages and actual damages would be difficult to calculate.
Liquidated damages that function as penalties—amounts grossly exceeding likely harm—are unenforceable.
Defenses to Breach Claims
Common defenses include no valid contract existed, the claimed breach wasn't material, the plaintiff breached first, performance was excused by impossibility or impracticability, the statute of limitations has passed, and waiver or estoppel based on plaintiff's conduct.
Statute of Limitations
Contract claims have time limits for filing—typically 4-6 years for written contracts and shorter for oral contracts, varying by state. Missing the deadline bars your claim entirely.
Getting Legal Help
Contract litigation requires careful analysis of the agreement, evidence of breach, and damage calculations. Business attorneys can evaluate your claim's strength, develop evidence, and pursue maximum recovery.